Prime Minister of the Republic of Kazakhstan Olzhas Bektenov met with the heads of the largest global oil and gas chemical companies — President of China Petrochemical Corporation (SINOPEC) Jiao Dong and Chairman of the Board of Directors of SIBUR LLC Mikhail Karisalov.

The key issue is the joint construction of the first integrated gas chemical complex for the production of polyethylene with a capacity of about $7.7 billion and a capacity of 1.25 million tons per year, which will constitute 1% of all global capacities.

During the meeting, a trilateral protocol was signed, officially completing SINOPEC’s entry into the project participants. The ownership structure of the plant is as follows: KazMunayGas — 40%, SINOPEC — 30%, SIBUR — 30%.

The Prime Minister emphasized the importance of the project due to its focus on the production of high value-added products.

To ensure the «Polyethylene» project with raw materials (ethane) at the Tengiz field, a gas separation complex (GSC) will be built. The GSC capacity is 9.1 billion cubic meters of dry gas processing per year, of which it is planned to allocate 1.6 million tons of ethane.

Ethane will be directed via a main pipeline from Tengiz to the «Karabatan» site (territory of the SEZ «NINT», Atyrau region), where a polyethylene production plant will operate.

It is planned to produce about 22 grades of polyethylene according to American Chevron Phillips and Univation licensing technologies, of which 40% will be premium grade. The extensive application range for both industrial and domestic purposes makes polyethylene the most demanded polymer in the world.

Polyethylene is used in medicine, prosthetics, defense, food industry, construction, space industry, etc. This polymer is used in the production of a wide range of goods: from wear-resistant plastic pipes, building materials, medicines, syringes, prostheses to body armor, astronaut clothing, and automotive parts. Target markets include Kazakhstan, CIS countries, China, Turkey, and European countries. At the same time, the selling price for domestic consumption will be lower than the import price.

The head of state has identified deep hydrocarbon processing as one of the key directions for the development of the oil and gas sector. The priority for our economy is high value-added production — the production of products with rapid growth in added value in the technological chain with a focus on export.

The added value between the initial raw material — ethane and the third-stage product — polyethylene increases by 20 times, from $80-90 to $1600-1800 per ton. The «Polyethylene» project will undoubtedly give a serious impetus to the development of both the processing industry and the country’s economy as a whole. According to experts’ calculations, the contribution to the country’s GDP by 2030 from the implementation of the project is estimated at approximately 1.2%,» noted Bektenov.

The construction of the plant is planned to be completed by 2029. During the construction period, more than 8,000 jobs will be created, and during the operation period — about 850 jobs.

It was noted that the project is being implemented with the support of the Government. The plant will be built in a special economic zone with the provision of appropriate infrastructure and a special tax regime. In this regard, the Prime Minister emphasized the importance of maximum utilization of local potential by the project participants.

«We, on the part of the state, provide comprehensive support for the implementation of projects important for the country’s economy. At the same time, we expect an increase in the share of local content from you. To do this, it is necessary to determine a list of goods and equipment that will be mandatory purchased from domestic manufacturers. Special attention should be paid to the training of Kazakhstani specialists and the transfer of competencies. For us, it is important to maximize the involvement of local personnel, including in managerial positions in the project. We expect a similar approach in the implementation of other joint projects,» emphasized the Prime Minister.

Thus, in addition to the «Polyethylene» plant, the construction of a gas separation complex and a main pipeline is planned.