Sinopec considers joining Kazakh polyethylene project

China Petroleum & Chemical Corp. (Sinopec) has agreed to potentially partner with Kazakhstan’s state-owned JSC NC KazMunayGas (KMG) on development of a proposed grassroots polyethylene plant planned for construction in Kazakhstan’s western Atyrau region (OGJ Online, Oct. 12, 2021).

As part of a preliminary agreement signed on May 18, Sinopec will consider joining on as an equal cooperative partner alongside KMG and existing partner PJSC Sibur Holding to implement the proposed 1.25-million tonne/year (tpy) project slated to be built in the Karabatan special economic zone of Atyrau, near Tengiz oil field, KMG and Sinopec said in separate releases on May 18 and May 22.

In addition to enabling use of the Chinese operator’s technologies and expertise in construction of petrochemical installations, Sinopec's pending entry into the polyethylene project as an equal partner would pave the way for future sales of the plant’s finished products into China, KMG said.

Upon the operator’s future decision to officially join the project, Sinopec said it will sign a formal purchase agreement—as well as other unidentified related, mandatory documents—with existing partners for participation in the Kazakh polyethylene venture.

KMG and Sibur plan to reach final investment decision (FID) to move forward the Atyrau polyethylene plant in 2024, KMG said.

Project background

First announced in 2021, KMG’s proposed polyethylene plant was to be one of two grassroots petrochemical projects to be built as part of an integrated gas-to-chemicals complex (IGCC) at the National Industrial Petrochemical Technopark (NIPT) in Atyrau in partnership with Sibur and JSC National Welfare Fund Samruk-Kazyna.

Alongside construction of the proposed polyethylene plant, Sibur and Samruk-Kazyna also agreed to partner with KMG on Kazakhstan Petrochemical Industries Inc. (KPI) LLP’s 500,000-tpy polypropylene plant at NIPT, which entered production on Nov. 8, 2022, KMG confirmed in its 2022 annual report to investors.

While no definitive timeframe has been revealed for when Sinopec will reach a final decision regarding its planned participation in the new polyethylene plant, KMG said it and partner Sibur—which completed its entry as project partner in April 2023—began development of basic engineering design as well as front-end engineering and design (FEED) on the plant in May 2023.

The partnership also has awarded contracts to license proprietary technologies for the plant, which will use Chevron Phillips Chemical Co. LLC’s MarTech advanced dual-loop (ADL) slurry process to produce high-density polyethylene (HDPE) and Univation Technologies LLC’s UNIPOL PE process technology, which will allow the site to shift between production of HDPE and linear low-density PE (LLDPE), KMG said in mid-May.

The Atyrau polyethylene plant is slated for completion in 2028, according to KMG’s 2022 annual report.