RDIF and leading international investors to invest in SIBUR’s ZapSibNeftekhim petrochemical facility construction project

Press release, 18.06.2015

St Petersburg, 18 June 2015 – A consortium comprising the Russian Direct Investment Fund (RDIF) and leading international investors, have agreed to invest in the development of ZapSibNeftekhim, SIBUR’s integrated petrochemical facility in Tobolsk, Tyumen Region.

RDIF plans to use part of its funding quota from the Russian National Welfare Fund (NWF) to develop infrastructure for SIBUR’s largest investment project, a hydrocarbon to polyolefin deep processing facility. The co-investment of NWF funds in the project was today approved by RDIF’s Supervisory Board at its regular meeting during the St Petersburg International Economic Forum.

The total investment budget for the project is estimated at up to $9.5 billion, of which up to $1.75 bn may be raised from the NWF through secured debt financing. A further $3.3 bn to be provided by RDIF, international co-investors and commercial banks. SIBUR will also continue to finance the construction project with its own funds.

ZapSibNeftekhim is designed to become the largest modern petrochemical facility in Russia. The project involves the construction of a steam cracker with a capacity of 1.5 mtpa of ethylene, c. 500 ktpa of propylene and 100 ktpa of butane-butylene fraction (BBF), along with units producing various grades of polyethylene and polypropylene with a total capacity of 2 mtpa.

The project aims to develop the deep processing of significant volumes of by-products of oil and gas extraction in Western Siberia, including associated petroleum gas (APG), and import substitution of polymers in the highest demand on the Russian market.

Kirill Dmitriev, CEO of the Russian Direct Investment Fund (RDIF), said:

“Constructing the petrochemical facility will be RDIF’s largest infrastructure project, and is focussed on import substitution and developing Russian exports. The new facility will lead to a considerable reduction in the high proportion of imports of value-added petrochemical products in Russia. ZapSibNeftekhim’s products will be of the same quality as imports. The deal structure, which is brining funds from RDIF, co-investors, the NWF and commercial banks makes the deal significantly more attractive to all parties.”

Dmitry Konov, CEO of SIBUR, said:

“The construction of ZapSibNeftekhim is SIBUR’s largest investment project with a significant impact on the Russian economy via addressing the important national objective of import substitution. The participation of RDIF and leading international investors and potential funding from the NWF prove the high investment appeal of the project.”

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Background information about the ZapSibNeftekhim project

ZapSibNeftekhim is a vital step in the development of the Western Siberia’s Petrochemical Cluster as laid out in Russia's Petrochemicals Development Plan until 2030.

Work on the site has already commenced: pile driving for the steam cracker is currently underway, while roads and a water disposal system have already been constructed.

Contracts for design engineering and supply of equipment and materials for the facility’s key processing units have been signed and are being implemented by leading engineering companies and suppliers which have been engaged for the project. SIBUR has signed an agreement for the design of infrastructure and off-site facilities with NIPIgazpererabotka, Russia’s leading engineering company in the gas processing industry.

ZapSibNeftekhim will form part of the Tobolsk production site including Tobolsk-Neftekhim and Tobolsk-Polymer, which are already operational. Tobolsk-Neftekhim’s gas fractionation capacity has been significantly expanded, an NGL pipeline has been constructed between the Purovsky Gas Condensate Processing Plant and Tobolsk-Neftekhim, and the throughput of the private Denisovka station of the Sverdlov Railway has been doubled, all specifically for this project.

The ZapSibNeftekhim facility will benefit from state-of-the-art technology in hydrocarbon processing and logistics which will guarantee the investment project’s reliability, safety, and efficiency.

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The Russian Direct Investment Fund (RDIF)was established in 2011 to make equity co-investments, primarily in Russia alongside reputable international financial and strategic investors. RDIF acts as a catalyst for direct investment in the Russian economy. Based in Moscow, RDIF’s management company is a 100% subsidiary of Vnesheconombank. Further information at www.rdif.ru

SIBURis a uniquely positioned vertically integrated gas processing and petrochemicals company. SIBUR owns and operates Russia’s largest gas processing business in terms of associated petroleum gas processing volumes and is a leader in the Russian petrochemicals industry.

SIBUR operates 26 production sites in various regions of Russia. The Group employs 25,000 people. The Company sells its products to over 1,400 major customers engaged in the energy, automotive, construction, fast moving consumer goods (FMCG), chemical and other industries in 77 countries worldwide. Further information at: www.sibur.ru

 

For further information, please contact:
Maria Medvedeva

Russian Direct Investment Fund

Media Relations Director

Tel: +7 495 644 34 14, ext. 2141

Mob: +7 964 726 17 73

E-mail: mm@rdif.ru

 

Hudson Sandler

Andrew Hayes / Elena Garside/ Yulia Shvets

Tel: +44 (0) 20 7796 4133