SIBUR-associated & natural gas prices - Issue 316 || PKN Orlen energy - Issue 323 || PDH Polska-polyppropylene project - Issue 323 || Unipetrol’s investment into polyethylene - Issue 323 || Ciech-polyolefin trade based on Iranian supply - Issue 323 || Grupa Azoty-new polyamide plant start-up - Issue 323 || BorsodChem-new chlorine plant - Issue 323 || Russian chemical production, Jan-Aug 2017 - Issue 323 || Russian chemical trade balance - Issue 323 || Delivery of equipment to ZabSibNeftekhim-August 2017 - Issue 323 || SIBUR-ethane for Amur Gas-Chemical Complex - Issue 323 || VNHK-Saipem - Issue 323 || Rosneft, three cluster approach for petrochemical investments - Issue 323 || Tatarstan-ethane expansion for Kazanorgsintez - Issue 323 || Russian ethylene production Jan-Aug 2017 - Issue 323 || Russian propylene exports, Jan-Aug 2017 - Issue 323 || Russian propylene sales Jan-Aug 2017 - Issue 323 || Russian styrene sales Jan-Aug 2017 - Issue 323 || Russian HDPE production, Jan-Aug 2017 - Issue 323 || Russian polypropylene, Jan-Aug 2017 - Issue 323 || Russian PVC, Jan-Aug 2017 - Issue 323 || Russian polycarbonate, Jan-Aug 2017 - Issue 323 || Russian paraxylene, Jan-Aug 2017 - Issue 323 || PTA imports, Jan-Jul 2017 - Issue 323 || Russian MEG, Jan-Aug 2017 - Issue 323 || Russian benzene production, Jan-Aug 2017 - Issue 323 || Russian benzene sales, Jan-Aug 2017 - Issue 323 || Russian orthoxylene sales, Jan-Aug 2017 - Issue 323 || Russian orthoxylene exports, Jan-Aug 2017 - Issue 323 || Russian phenol production, Jan-Aug 2017 - Issue 323 || Russian C4s, Jan-Aug 2017 - Issue 323 || Kazan Plant of Synthetic Rubber-silicon project - Issue 323 || Russian synthetic rubber producer news - Issue 323 || Russian methanol exports, Jan-Aug 2017 - Issue 323 || Russian methanol domestic sales, Jan-Aug 2017 - Issue 323 || Metafrax-Casale, 2 October 2017 contract - Issue 323 || Gazprom-gas supply agreements for methanol and fertiliser projects - Issue 323 || Yatek methanol project-Japanese involvement - Issue 323 || Russian butanol production, Jan-Aug 2017 - Issue 323 || Saratovorgsintez-acrylamide project - Issue 323 || Calcium hydroxide Novocheboksarsk - Issue 323 || Ukrainian polymer imports, Jan-Aug 2017 - Issue 323 || Karpatneftekhim restarting export activity - Issue 323 || SOCAR completes overhaul of cracker and polyethylene plant - Issue 323 || SOCAR-chemical exports, Jan-Sep 2017 - Issue 323 ||
 


Russian Chemical Production 2016

The petrochemical industry has been one of the star sectors in the Russian economy over the past few years, and has strikingly out-performed GDP which has been stuck mostly in the doldrums. Lower oil prices may have significantly dented the Russian government’s budgetary finances, but the trend has been broadly beneficial to the petrochemical industry. Both in terms of facilitating lower feedstock costs and the devaluation of the rouble Russian petrochemical producers have witnessed sharp rises in revenues and profits in the past 10 quarters. The devalued rouble has meant that Russian producers have been able to compete against imports on the domestic market and also for exports to be more profitable. The downside of the lower rouble relates to equipment and technology costs where Russia is dependent primarily on imports. Certain types of equipment can be replaced by domestic production, but most of the key plant licenses such as for olefins, polyolefins and organic chemicals are available only from foreign companies.

The major petrochemical project currently under construction in Russia comprises SIBUR’s ZapSibNeftekhim complex at Tobolsk in West Siberia, where the 1.5 million tpa cracker is scheduled for completion by 2019. Aside Tobolsk, the key project ideas are being developed in East Siberia and the Russian Far East. SIBUR is considering the construction of a similar complex to Tobolsk in the Amur region close to the Chinese border where Gazprom is currently constructing the world’s gas processing plant. Rosneft is in the throes of constructing a large refinery and petrochemical complex at Nakhodka in the Russian Far East whilst other petrochemical projects are being evaluated by Rosneft and Chinese partners for East Siberia. Petrochemical and fertiliser plants in the eastern regions of Russia can provide huge export opportunities to China and other parts of Asia and help to monetise feedstock potential.

Smaller but equally important projects are being undertaken in the western parts of Russia which indicate that Russia can expect to see a sharp rise in petrochemical production over the next decade. Low oil and gas prices help to encourage investing downstream and seeking value added opportunities. The main concern for Russian petrochemical companies is the state of the domestic economy which may have come through the worst of its most recent downturn, but offers little more than modest growth rates for the foreseeable future. Economic reform is seen by even by parts of the government as the key to unlocking Russia’s economic potential, but these reforms are largely in conflict with the regime’s primary concern of retaining power. Despite the political stagnation, the Russian chemical industry seems capable of performing strongly on its own and can be expected to become more important globally over the next decade.

Russia’s neighbours seek to add value

Russia’s western neighbours include Ukraine where polymer consumption revived in 2016 after the large falls in 2014 and 2015. Currently Ukraine lacks much of its own chemical production due largely to the political all-out with Russia and impact on feedstock availability. As the country strives to realign its economic strategy away from Russia towards European markets the country may offer opportunities as a chemical consumer and the possibility for jvs in small tonnage chemistry. Belarus operates a stable production regime for chemicals and petrochemicals, and depends on Russia for nearly all its feedstocks. Its main production areas include acrylonitrile, caprolactam, methanol, polyesters and olefins. Russia’s southern neighbours are characterized by large hydrocarbon deposits but low consumption in chemical products. Major projects in the petrochemical industry are underway in the construction stages in Turkmenistan, Azerbaijan and Kazakhstan, all of which are aimed at export activity.

Central European chemical industry, modernisation and innovation

Since Central European countries joined the EU in 2002 the chemical industry in this region has undergone huge changes in terms of technological conformity to EU technical standards. PKN Orlen and MOL have emerged as the dominant companies in the petrochemical industry combining assets in Poland and the Czech Republic, and Hungary and Slovakia respectively, whilst the consolidation and expansion of Grupa Azoty has created one of Europe’s leading fertiliser producers. Polish companies have been prepared to invest outside the country whilst at the same time seeking new products to be introduced to the market. By contrast to Central Europe, South East Europe’s chemical industry has regressed in the past decade but there are some indications of outside investment in Serbia and Romania. The major projects being undertaken in Central Europe include Unipetrol’s new HDPE plant, Grupa Azoty’s PDH propylene plant, Orlen’s new metathesis project for propylene and MOL’s synthetic rubber plant in Hungary.

Russian Chemical Production 2016 (unit-kilo tons)

Full year results available on Statistical Database or contact us

Product

Q1 16

Q2 16

Q3 16

Q4 16

Ethylene

753.1

679.7

664.8

 

Propylene

379.7

361.3

344.4

 

Acetylene

7.9

8.3

9.5

 

Acyclic hydrocarbons

980.1

965.4

925.3

 

Benzene

315.4

285.3

297

 

Toluene

84.4

101.3

94.8

 

Xylenes

145.5

145.4

130

 

Styrene

179.2

172.1

165.1

 

Ethylbenzene

198.4

195.6

182.5

 

Acyclic hydrocarbons Chlorinated

205.9

154.3

205.8

 

Methylene Chloride

3.6

3.3

3.5

 

Chloroform

14.1

9.1

9.7

 

VCM

129.8

81.2

138.9

 

Other derivatives of hydrocarbons

7.1

7.6

6.9

 

Industrial fatty alcohols

29.2

28.3

27.8

 

Alcohols higher for plasticizers

26.7

26.2

26

 

Spirits, monatomic

994

1018.7

854.3

 

Spirits, monatomic, saturated

994

1018.7

854.3

 

Methanol-venom synthetic

750.9

769.9

658

 

Methanol rectified wood-chemical Technology

162.6

184.1

132.4

 

Methanol raw in terms of rectified

9.2

5.6

3.6

 

Isopropyl alcohol (1-propanol)

9.8

3.5

6

 

N-butyl alcohol (1-butanol)

38.2

34.2

33.8

 

Isobutyl alcohol (isobutanol)

23.2

21.4

20.3

 

Glycols

127.7

133.7

110.8

 

Propylene glycol (1,2-propanediol)

0.3

39.3

0.2

 

Phenol synthetic crystalline

60.9

23.3

43.1

 

Acetic Acid

48

12.7

52.5

 

Butyl Acetate

10.7

9.6

12.5

 

Phthalic Anhydride

32.1

27.7

26.9

 

Amine functional group

25.9

21.3

21

 

Compounds with other nitrogen function

0.2

6.9

0.3

 

Organic sulphur compounds

18.6

16.1

18.4

 

Methionine

7.3

19.4

7.4

 

Heterocyclic compounds, not included in other categories; nucleic acid and salts thereof

56.7

31

48.5

 

Esters of phosphorus acids and complex esters of other inorganic acids; derivatives

0

58.3

0

 

The compounds with aldehyde functional group

165.4

171.2

191.7

 

Formaldehyde

156.3

123.1

175.4

 

Enzymes and other organic compounds that are not included in other categories

4.8

67.6

9.8

 

Derived products of plant origin or resins

149.2

145.4

195.5

 

Rosin and resin acids

7.5

10.4

6.6

 

charcoal

13.7

110.2

18.8

 

Oils and other products of the distillation of high temperature coal tar, pitch and pitch coke

239.1

180.4

295

 

Ammonium chloride; nitrites; potassium nitrate; ammonium carbonates

16.5

13.4

16.1

 

Nitrite of sodium technical (sodium hydrazoic sour)

5.2

4.6

4

 

Bulk Plastics

1968.4

1861.1

1910.8

 

Polyethylene

555.5

516.6

502.8

 

Polystyrene

137.7

138.7

134.1

 

PVC

211

167.3

215.9

 

Polyesters simple and complex; polycarbonates, alkyd resins and epoxy in primary forms

160.9

168.1

147.6

 

Polypropylene

382.8

371.8

339.7

 

Polypropylene, in primary forms

370.6

370.6

332.4

 

VAM

12.3

8.4

12.2

 

Polyacrylates 

4.5

6.1

6.2

 

Polyamides

37.6

40.1

39.5

 

Amino-resins

298.9

273.7

335.6

 

Urea resins

227

232.3

289.4

 

Urea-formaldehyde resins

112.1

126.5

155

 

Urea-furana resin in the form of pressing mass

0.3

0.3

0.3

 

Amino aldehyde resins

88.7

83.8

87.3

 

Phenol-formaldehyde resole resins

5.9

4.9

7.2

 

Phenol resole resins in the other primary forms

51.6

46.3

43.6

 

Silicone polymers

1.5

1.3

1.6

 

Plastics 

77.1

84.5

88.1

 

Waste, parings and scrap of plastics

0.2

0.3

0.3

 

Synthetic Rubber

371.3

403.6

367.3

 

Insecticides

7.4

8.6

3.2

 

Herbicides

15.5

15.9

9.3

 

Fungicides

5.1

6

6.4

 
 
  • Russian petrochemical industry wins from low oil prices

    The petrochemical industry has been one of the star sectors in the Russian economy over the past few years, and has strikingly out-performed GDP which has been stuck mostly in the doldrums. Lower oil prices may have significantly dented the Russian government’s budgetary finances, but the trend has been broadly beneficial to the petrochemical industry. Both in terms of facilitating lower feedstock costs and the devaluation of the rouble Russian petrochemical producers have witnessed sharp rises in revenues and profits in the past 10 quarters. The devalued rouble has meant that Russian producers have been able to compete against imports on the domestic market and also for exports to be more profitable. The downside of the lower rouble relates to equipment and technology costs where Russia is dependent primarily on imports. Certain types of equipment can be replaced by domestic production, but most of the key plant licenses such as for olefins, polyolefins and organic chemicals are available only from foreign companies.

    The major petrochemical project currently under construction in Russia comprises SIBUR’s ZapSibNeftekhim complex at Tobolsk in West Siberia, where the 1.5 million tpa cracker is scheduled for completion by 2019. Aside Tobolsk, the key project ideas are being developed in East Siberia and the Russian Far East. SIBUR is considering the construction of a similar complex to Tobolsk in the Amur region close to the Chinese border where Gazprom is currently constructing the world’s gas processing plant. Rosneft is in the throes of constructing a large refinery and petrochemical complex at Nakhodka in the Russian Far East whilst other petrochemical projects are being evaluated by Rosneft and Chinese partners for East Siberia. Petrochemical and fertiliser plants in the eastern regions of Russia can provide huge export opportunities to China and other parts of Asia and help to monetise feedstock potential.

    Smaller but equally important projects are being undertaken in the western parts of Russia which indicate that Russia can expect to see a sharp rise in petrochemical production over the next decade. Low oil and gas prices help to encourage investing downstream and seeking value added opportunities. The main concern for Russian petrochemical companies is the state of the domestic economy which may have come through the worst of its most recent downturn, but offers little more than modest growth rates for the foreseeable future. Economic reform is seen by even by parts of the government as the key to unlocking Russia’s economic potential, but these reforms are largely in conflict with the regime’s primary concern of retaining power. Despite the political stagnation, the Russian chemical industry seems capable of performing strongly on its own and can be expected to become more important globally over the next decade.

    Russia’s neighbours seek to add value

    Russia’s western neighbours include Ukraine where polymer consumption revived in 2016 after the large falls in 2014 and 2015. Currently Ukraine lacks much of its own chemical production due largely to the political all-out with Russia and impact on feedstock availability. As the country strives to realign its economic strategy away from Russia towards European markets the country may offer opportunities as a chemical consumer and the possibility for jvs in small tonnage chemistry. Belarus operates a stable production regime for chemicals and petrochemicals, and depends on Russia for nearly all its feedstocks. Its main production areas include acrylonitrile, caprolactam, methanol, polyesters and olefins. Russia’s southern neighbours are characterized by large hydrocarbon deposits but low consumption in chemical products. Major projects in the petrochemical industry are underway in the construction stages in Turkmenistan, Azerbaijan and Kazakhstan, all of which are aimed at export activity.

    Central European chemical industry, modernisation and innovation

    Since Central European countries joined the EU in 2002 the chemical industry in this region has undergone huge changes in terms of technological conformity to EU technical standards. PKN Orlen and MOL have emerged as the dominant companies in the petrochemical industry combining assets in Poland and the Czech Republic, and Hungary and Slovakia respectively, whilst the consolidation and expansion of Grupa Azoty has created one of Europe’s leading fertiliser producers. Polish companies have been prepared to invest outside the country whilst at the same time seeking new products to be introduced to the market. By contrast to Central Europe, South East Europe’s chemical industry has regressed in the past decade but there are some indications of outside investment in Serbia and Romania. The major projects being undertaken in Central Europe include Unipetrol’s new HDPE plant, Grupa Azoty’s PDH propylene plant, Orlen’s new metathesis project for propylene and MOL’s synthetic rubber plant in Hungary.



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