Mideast funds, Russian govt inject capital in SIBUR’s major cracker

ICIS, 08.12.2015

LONDON (ICIS)--SIBUR’s $9.5bn ZapSibNeftekhim gas-fed cracker in Tobolsk has received a capital injection from Middle Eastern sovereign wealth funds and Russia’s government, the Russian petrochemical major said on Wednesday.

Wihtout disclosing exact investments, SIBUR said the Russian Direct Investment Fund (RDIF) and "leading Middle Eastern sovereign wealth funds" had invested in the 1.5m tonnes/year ethylene cracker.

The facility, which received a green light from SIBUR in September 2014, will also produce 500,000 tonnes/year of propylene and 100,000 tonnes/year of butane-butylene fraction (BBF). According to SIBUR, other units will produce up to 2m tonnes/year of various grades of polyethylene and polypropylene.

"Investments made by RDIF and its international co-investors into ZapSibNeftekhim prove the value of this project, SIBUR’s largest to date. SIBUR has already invested a substantial amount of its own funds and received credit funds from large commercial banks," said Dmitry Konov, SIBUR’s CEO.

"The long-term financing from the NWF [Russia’s National Welfare Fund] on favourable terms as well as investments from RDIF and its partners provide additional guarantees of successful project completion and help to optimise the company’s debt portfolio."

Russia's government completed on 4 December the issuance of bonds worth $1.75bn to help finance the project.

"In addition to funds raised in the form of debt financing from the NWF, up to $3.3bn are being provided by commercial banks, RDIF and its co-investors. SIBUR is also continuing to fund the facility’s construction at its own expense," said the company.