Tatneft/KazMunayGas set up jv for US$1 bn BR project

Tatneft/KazMunayGas set up jv for US$1 bn BR project

In line with its plans to produce butadiene rubber (BR) in KazakhstanRussian oil/gas firm PJSC Tatneft has tied up in a joint venture with Kazakhstan state-owned oil/gas firm KazMunayGas for the implementation of the US$1 billion project to produce butadiene and BR.

The plans provide that the production will be launched in 2026 at the territory of the SEZ “National Industrial Petrochemical Technopark” (Free Economic Zone) in the Atyrau region of Kazakhstan. There will be about 2,000 jobs created at the site of the new production facility at the construction period stage, and more than 700 job positions at the stage of the facility’s operation.

The planned capacity of the enterprise will reach up to 180,000 tonnes of butadiene and butadiene rubbers per year. The shares of KazMunayGas and Tatneft in the project will amount to 25% and 75%, respectively. The preliminary cost of the project is estimated at about US$1 billion, and the parties are considering options for financing the project, including through borrowed funds.

It is assumed that raw materials will be supplied from the Tengiz and Korolev fields in Kazakhstan. The plans provide for finished products to be sent to a tyre manufacturing factory in the Karaganda region, as well as for export to European countries, Russia, China, Turkey, etc.

Nail Maganov, General Director of Tatneft, and Alik Aidarbayev, Management Board Chairman of NC KazMunayGas, signed an agreement on the basic interaction terms of the Butadiene project as well as a roadmap for the project implementation, a framework agreement and agreed on an action plan for cooperation.

Nail Maganov, General Director of Tatneft said,“Tatneft has big plans in petrochemicals, and we are happy to develop this area together with our Kazakh partners. Kazakhstan is a strategic partner for us. We already have the collaborative experience, as we now also apply joint efforts in the construction of the tyre manufacturing factory in the Karaganda region, and this is the practical implementation of the Strategy for the economic integration of the countries – members of the Eurasian Union.”

He added, “We have assured ourselves once again that Kazakhstan has created the most comfortable conditions for the implementation of large-scale investment projects.”

Alik Aydarbayev, Chairman of the Management Board of JSC NC KazMunayGas said, “In accordance with the Development Strategy our company seeks to expand the value chain of the company’s products and is actively developing the petrochemical industry in the Republic of Kazakhstan. Establishment of a joint venture between KazMunayGaz and Tatneft is the evidence of this. I am sure that the project will contribute to the establishment of partnership relations between Kazakhstan and Tatarstan, and will also diversify the economy of our country.”

JSC National Company KazMunayGas (KMG) is a vertically integrated oil and gas company in Kazakhstan. KMG manages assets throughout the entire production cycle from exploration and production of hydrocarbons to transportation, refining and the provision of specialized services. The company, which was founded in 2002, promotes the interests of Kazakhstan in the country’s oil and gas industry.