New Market Research Report: Russia Petrochemicals Report Q1 2011

Dec. 14, 2010 - PRLog -- With investment of up to US$3bn over the medium term, Russian capacities are set to rise rapidly although the country will still fail to exploit fully its enormous downstream potential, according to BMI's latest Russia Petrochemicals Report. There is plenty of potential naphtha and ethane feedstock availability from the expansion of refineries and the opportunities presented by a growing gas sector.

In October 2010, Sibur outlined its medium-term investment plans, which will focus on the completion of the 1mn tpa cracker at Tobolsk in 2015 and could feature the involvement of Dow Chemical. The drive is towards the diversification of feedstock away from naphtha to LPG and ethane, which will be used for production at the Tobolsk cracker. Sibur currently operates three crackers with combined capacity of 500,000tpa. Sibur's 220,000tpa Kstovo cracker is being expanded to accommodate the 330,000tpa RusVinyl PVC joint venture with SolVin at Kstovo, which due onstream in 2013. Meanwhile, Sibur's 500,000tpa PP plant under construction at Tobolsk will lift Sibur's total PP capacity to 750,000tpa in 2013. Sibur is also expanding PS capacity with a 50,000tpa line due onstream at Perm by the turn of 2011 and a second 50,000tpa line due to follow. The company is also building a 50,000tpa styrene butadiene styrene plant at Voronezh.

Meanwhile, Rosneft is upgrading its Angarsk petrochemical complex, selecting Ineos Innovene technology for a 345,000tpa HDPE/LLDPE plant and the Lummus Novolen process for a new 250,000tpa PP facility. The units form part of a major upgrade at the Angarsk petrochemical complex and are due on stream in 2014. The upgrade includes the expansion of the cracker facility, which is designed to produce 300,000tpa ethylene but has been working at well below capacity.

In 2010, the Russian petrochemicals industry had olefins production capacities of 3.62mn tpa ethylene, 1.63mn tpa propylene and 710,000tpa butadiene. In the aromatics segment, Russia has plants with combined capacities of 870,000tpa benzene, 390,000tpa toluene, 435,000tpa cumene and 360,000tpa xylenes. These aromatic compounds are used to manufacture intermediate petrochemicals products, with Russia hosting 570,000tpa ethylbenzene (EB), 650,000tpa styrene monomer (SM) and 230,000tpa terephthalic acid. These feed polymer plants with combined capacities that include 210,000tpa PS, 1.03mn tpa PET and 65,000tpa polycarbonate. In the styrenics chain, Russia has capacities of 335,000tpa styrene-butadiene rubber and 20,000tpa of acrylonitrile-butadiene-styrene copolymer. In the polyethylene segment, Russia has capacities totaling 770,000tpa HDPE, 600,000tpa LDPE and 230,000tpa LLDPE. In the vinyl chloride chain, the country also hosts 490,000tpa vinyl chloride monomer (VCM) and 1.04mn tpa PVC capacities. In 2015, we envisage ethylene capacities totalling 5.22mn tpa; this may be greater if plans for the Salavat Neftekhim Petrochemicals Complex come to fruition, with the possibility of cracker capacity of 1mn tpa. Based on current plans, PE and PP capacities are set to rise by 64% and 150% respectively from 2010 levels, while ethylene and propylene capacities should grow by 36% and 60% respectively.

With a petrochemicals rating of 58.8 points, Russia's commanding position in our petrochemicals rankings for Central and Eastern Europe (CEE) have been eroded by a poor country risk profile, although improvements in its risk profile over the past quarter have increased the country's score by 0.3 points. Despite holding around one-third of the combined polymer production capacity of the 10 countries surveyed, and providing the large bulk of regional cracker capacity expansion in the next five years, Russia lags behind EU members in terms of the structure of the economy. The main weakness for investment in the petrochemicals sector is the absence of an industrial policy and a legislative framework aimed at overhauling the chemicals sector. There is also a lack of foreign investment and its associated operational and management expertise, which could limit the prospects for growth. Russia is 1.0 points ahead of Poland in BMI's Central and Eastern Europe Petrochemicals Ratings.

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Fast Market Research is an online aggregator and distributor of market research and business information. We represent the world's top research publishers and analysts and provide quick and easy access to the best competitive intelligence available.