Kazakhstan turns to high-value added manufacturing with building polyethylene plant in Atyrau region

Prime Minister Olzhas Bektenov had a meeting with the heads of world’s leading petrochemical companies – President of China Petrochemical Corporation (SINOPEC) Zhao Dong and Chairman of the Management Board of Russia’s SIBUR Mikhail Karisalov, Kazinform News Agency reports citing the press service of the Government.

The key issue of the meeting agenda is a joint construction of the first integrated gas-chemical complex on polyethylene production in Kazakhstan worth $7.7 billion tenge with the annual capacity of 1.25 million tons, which is expected to account for 1% of the total global capacities.

The meeting ended with signing a trilateral protocol which officially confirmed SINOPEC’s joining the project. The structure of the plant owners looks as follows: KazMunayGas – 40%, SINOPEC – 30%, and SIBUR – 30%.

Olzhas Bektenov highlighted the project’s importance in view of its target on high-value added manufacturing.

The raw material – ethane – will be supplied from Tengiz. For this purpose, a gas separation complex  will be built on the field. The capacity of the complex is projected at 9.1 billion cubic meters of dry gas per annum, out of which 1.6 million tons of ethan will be extracted.

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

The plant will produce some 22 types of polyethylene as per Chevron Phillips and Univation technologies, 40% of which will be of premium level.

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

The Head of State named deep processing of hydrocarbons as one of the key areas for the development of oil and gas sector. The priority for our economy is high value-added production – manufacturing the export-oriented high-value added products. The added value between the feedstock - ethane and the third stage product - polyethylene increases 20 times, from $80-90 to $1,600-1,800 per a ton. The Polyethylene project will certainly give a serious impetus to the development of both the manufacturing industry and the country’s economy as a whole. According to experts, the contribution to the country’s GDP by 2030 from the implementation of the project is estimated at approximately 1.2%, noted Olzhas Bektenov.

The construction of the plant is slated for 2029. The implementation of the project will let create more than 8,000 jobs at the stage of construction, and about 850 jobs in the period of exploitation.

The project is implemented under the Government’s support.

The plant will be built on the territory of the special economic zone with an appropriate infrastructure and special tax regime.

The Prime Minister emphasized the need to increase local content and attract local worfkforce as much as possible.

Apart from the polyethylene plant, a gas separation complex and a main pipeline will be built.