Market Outlook for Russia, Expansion of Petrochemicals

Lets have a look at Russia petchem industry outlook in 2008, the long and short of it.

Currently, Russia is one of the most prominent world leading oil and gas producers due to its high reserve in the country. Russia holds the biggest gas reserve in the world but more than half of its plastics and petrochemical products are imported. 2008 will look into a change in this and potentially become the biggest petrochemical producer in the world.

Russia is planning to raise the overall production of chemicals and petrochemicals by 40% by 2015 at a whopping $163 billion. The plan will comprise of 800 new petrochemical plants expansion and empl0yment
of 750,000 people.

Moscow wants the country's hydrocarbon molecules to be processed domestically, setting the new direction for the country's petchem industry.

1. Dow Chemical has signed a memorandum of intentions (MoI) with Gazprom and Sibur to study joint gas processing projects in Russia's Yamalo-Nenets Autonomous Region.
   
   
2. Gazprom and BASF offshoot Wintershall formed a joint gas trading firm, Russian-registered Gazprom YRGM Trading, to buy gas from the Yuzhno-Russky gas deposit in the Yamalo-Nenets Region.
   
   
3. Russia's Yamalo-Nenets Autonomous Region will be producing 25bn cubic metres/year of gas from 2009. Gazprom will raise its natural gas market share in Europe to 33% in 2015.
   
   
4. President Vladimir Putin has urged development of the country's refining and petrochemical sectors instead of importing petrochemical products.
   
   
5. Gazprom would raise ethylene production up to 7.66m tonnes/year, up three-and-a-half times from now, while plastics production would rise up to 1.7m tonnes/year by 2015. 
   
   
6. Astrakhangazprom (AGP) announced plans to build a gas-chemical complex, including 300,000 tonne/year of PP and 150,000 tonne/year of polyethylene (PE) facilities.
   
   
7. The following year Gazprom's petrochemical subsidiary Sibur renewed plans to build facilities with nameplate capacity of up to 900,000 tonnes /year of polypropylene (PP) and up to 500,000 tonnes/year of PE in Tobolsk. 
   
   
8. $1.3bn production facilities are expected to be built at Tobolsk-Neftekhim. The construction is tentatively expected to start in May 2008 and be completed by 2010-2011.
   
   
9. RusVinyl is building a 330,000 tonne/year PVC plant in the Nizhny Novgorod due on stream in 2010.
   
   
10. LUKoil subsidiary LUKoil-Neftekhim plans to build a $3.5bn petrochemical hub in Southern Russia.

Despite all these, Russia's biggest problem remains that of slow materialisation of projects, mostly due to low investment in the country. Russia’s petrochemical sector is yet to develop sufficient capacities to become the world superpower in petrochemical products to the world market, but the tendency for the future years would be in that direction.