Sinopec and Sibur to Produce Rubber in Krasnoyarsk

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May 15 – China Petroleum and Chemical Corporation (Sinopec) and Sibur, the Russian petrochemicals group, have entered into a cooperation agreement to form a butadiene nitrile rubber joint venture in the Siberian city of Krasnoyarsk.

The cooperation deal was signed by Sibur’s CEO Dmitry Konov and Sinopec’s president Wang Tianpu at the recent Russian-Chinese Forum on commercial investment cooperation in Moscow.

The cooperation agreement includes a mechanism for the financing of the joint venture, and arrangements relating to share capital, management, raw material supplies and marketing.

Under the joint venture, Sinopec plans to buy 25 percent plus one share in the Krasnoyarsk rubber plant. This may cost the Chinese company around 250 million rubles (US$8.9 million), according to the local investment company Russkie Investori – Sibir.

The Russian-Chinese joint venture will also consider expanding the plant’s current production capacity from 42,000 tons per year to 56,000 tons per year.

The joint venture is expected to be established by the end of 2012.

As well as the rubber plant joint venture agreement signed in October 2011, Sinopec signed a preliminary agreement with Sibur to form a polyisoprene rubber JV, including the supply of petrochemical as well as unconventional sources as feedstocks.

Sibur will provide polymerization and finishing technology for both joint ventures, and the companies will work together on upstream and downstream businesses.

Butadiene nitrile rubber is used in the petroleum and natural gas industries and in applications such as water, sewer, mineral oil and vegetable oil.

Headquartered in Beijing, Sinopec distributes synthetic fiber, chemical fibers and fertilizers, as well as manufacturing petroleum products and crude oil.

Sinopec Group is ranked second globally in terms of oil refining capacity and is in fourth place in ethylene output. The group leads the Chinese market in petrol, diesel, synthetic rubber, polymers and fertilizers.

Sibur is the largest petrochemical company in Russia and Eastern Europe, one of the fastest growing petrochemical companies in the world and in the top three by EBITDA margin in the petrochemical industry globally.

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