RUSSIA - Nizhnekamskneftekhim.

The petrochemicals firm Nizhnekamskneftekhim last July signed a licence agreement with Basell, a BASF-Shell JV, for a 200,000 t/y polyethylene plant which will cost $150m. The project is being financed with company funds and bank loans.

Nizhnekamskneftekhim chose Basell out of five participants in a tender held in May. The other bidders included Daewoo Chemical, Univation Technologies and Mitsui. The Russian company will have signed all contracts relating to the project before end-2004. Nizhnekamskneftekhim hopes to begin construction in 2005 and for the plant to be on stream in 2007.

LUKoil Petrochemicals: Since 1997, LUKoil has been actively developing its petrochemicals sector in line with a strategic development programme it adopted in that year. The company said in its annual report for 2003 released earlier this year that its production of petrochemicals was profitable, but it did not elaborate. It said a "stable demand for petrochemical feedstock makes LUKoil less dependent on fuel markets". The following are LUKoil's basic petrochemical-producing subsidiaries:

- OOO Stavrolen, based in the Russian city of Budenovsk.
- OOO Saratovorgsintez, based in the Russian city of Saratov.
- ZAO LUKOR, in Ukraine, based in the city of Kalush.
- AO LUKoil NeftoKhim Burgas AD, in Bulgaria based in the city of Burgas.
- AO Petrotel-Lukoil, in Romania.

The company said in its report: "LUKoil today has the biggest petrochemical asset base in Russia and East Europe. The Company meets a major part of domestic demand for various chemicals and is a leading exporter of chemical products to more than 50 countries in Europe, Asia, Africa and America.

LUKoil petrochemical plants in 2003 produced 2.26m tons of petrochemicals, up 14% from 2002. Its output included 1.68m tons of pyrolysis. It said LUKoil was working on substitution of distillate fractions with cheaper gas as raw material for pyrolysis. It said the share of natural gas as petrochemical feedstock in its system last year was 18.1%, compared with 14.2% in 2002.

LUKoil supplied 77% of total inputs to its petrochemical facilities from its own subsidiaries. "The capacity load utilisation rate at the Company's... petrochemical facilities in 2003 was 80% (up from 74% in 2002)".

LUKoil in 2003 produced 1.76m tons of petrochemicals at its Russian and Ukrainian plants. The Bulgarian unit, LUKoil-NeftoKhim Burgas, produced 371,500 tons of petrochemicals, including 147,700 tons of organic synthesis, and 223,800 tons of polymers, of which 71,600 tons were high-density polyethylene (HDPE).

LUKoil said in its report: "At present, the Company is a leader in the petrochemical sector of Russia, the CIS and East Europe being: Major producer of olefins (total production capacities exceed 1 million t/y) in East Europe;

"Major producer of polyethylene (total production capacity 480,000 t/y) in East Europe;

"Major producer in East Europe and in Russia the only producer of acrylonitrile - feedstock for production of synthetic fibers (production capacities rank 4th in Europe);

"Owner of a vinyl chloride-monomer (VCM) plant - the largest in Europe -(production capacity is 370,000 t/y);

"The only producer of nitron polyacrylic fibers in Russia;

"Major producer of methyl methacrylate in Russia.

"The Company manufactures...pyrolysis, organic synthesis, fuel fractions and polymer materials at its refineries in Russia and the Ukraine".

LUKoil-Neftekhim, a Russia-based unit, in late 1999 entered into a co-operation deal with Fina Research to help LUKoil penetrate the European market for its surplus production of polyethylene. LUKoil is to expand polyethylene capacity with a new plant to be built. It is planning to build a petrochemical plant in one of the Baltic countries.

Gazprom intends to become a major producer of petrochemicals. Now it is to concentrate on the rejuvenation of existing plants and securing gas feedstocks, such as LPG. In 1999 it began work on a new petrochemical holding company in partnership with Tobolsk, in western Siberia which has Russia's biggest petrochemical complex.

Among other things, the new company has secured gas feedstocks on long-term basis. The new company controls about 500,000 tons/year of LPG production. Later this will have to be doubled. Most of the LPG will be supplied to the Tobolsk complex.

Tomskgaz, owned 50-50 by Gazprom and Eastern Oil Co., in 1999 began producing gas dedicated to the petrochemical industry from the Myldzhino field, in the Tomsk area at the rate of 5 MCM/d, with the field's gas reserve estimated at 100 BCM. By 2005 this should produce 25 MCM/d to supply the Tomsk petrochemical complex, with a pipeline linking it to the field already built.