One of the directions for the further development of Kazakhstan's oil and gas industry is the deep processing of hydrocarbon raw materials, that is, the production of petroleum and gas chemical products of high added value.
According to international analytical companies (McKinsey, IHS), the observed increase in the world population and increase in per capita income will lead to an increase in consumption of oil and gas chemical products by 230 times to 1.8 trillion. US dollars (from the current 1 trillion US dollars).
At the same time, the world production of the most demanded polymers - polypropylene and polyethylene (60% of the total consumption of all polymers) will lag behind demand, even if all announced projects are realized by 2030.
So, according to international marketing companies Platts and IHS, the demand for polypropylene will be more than 98 million tons by 2030, with a supply of 90 million tons. Also demand for polyethylene will increase to 160 million tons, with a supply of about 120 million tons.
A positive assessment of the opportunities for the development of petrochemical industries in Kazakhstan is confirmed by the results of numerous studies, including international oil and gas companies such as Exxon Mobil, Shell and Nexant consulting company.
Taking into account the world trends, in particular the active search for alternative sources of energy for hydrocarbons, it is projected that in the future oil and gas chemistry will be the main consumer of oil and gas produced.
Therefore, in order to maintain the pace of development of the entire oil and gas industry, the Government of Kazakhstan, like other oil-producing countries, pays special attention to oil and gas chemistry.
Substantial measures of state support for the organization of modern oil and gas chemical industries have been adopted.
In particular, a special petrochemical zone was created in Atyrau oblast, where tax and customs preferences operate. The procedure for attracting foreign labor has been simplified. The issue of the direct application of international standards in the design and construction has been resolved, which significantly reduces the cost of projects.
Considering that the provision of ready infrastructure projects allows to reduce up to 20% of capital expenditures and up to 15% of operating costs, the state finances construction of the infrastructure of this FEZ.
As is known, in the territory of a special petrochemical zone in Atyrau oblast, projects are being implemented to produce polypropylene and polyethylene.
В рамках официального визита Президента Республики Казахстан (РК) Нурсултана Назарбаева в Объединенные Арабские Эмираты (ОАЭ) 24 марта т.г. подписаны документы по сотрудничеству в реализации вышеуказанных проектов.
In particular, the Ministry of Energy of the Republic of Kazakhstan, Samruk-Kazyna FNL (United Chemical Company LLP), Austrian company Borealis signed the TermSheet Agreement on the main terms of cooperation on the Polyethylene Production Project in Atyrau oblast.
The signed Agreement (TermSheet) fixes a package of state support measures and stipulates the transition to the design stage (development of a feasibility study).
The planned period for completion of the feasibility study is 2018.
This project will allow to organize production of up to 1,250,000 tons of polyethylene per year in the Republic of Kazakhstan, which will fully cover domestic demand and ensure stable export earnings. Also within the project it is planned to create about 4000 workplaces for the construction period, 560 permanent workplaces in the period of operation, and up to 3,000 jobs for related industries due to the multiplier effect, and as a result, annual deductions to the budget in the form of PIT, social tax, social and pension contributions. As a result of the project implementation, the transfer of advanced foreign technologies will take place, and the products produced will become the raw material for more than 50 types of polymer products for further redistribution (promoting the development of local polymer technology products). Contribution to the GDP of the Republic of Kazakhstan - an average of 1.2% per year.
The second document is a Memorandum of Understanding regarding cooperation on the project. Polypropylene production in Atyrau region was also signed between the Ministry of Energy of the Republic of Kazakhstan, Samruk-Kazyna FNB (United Chemical Company) and Borealis.
According to the Memorandum, Borealis will conduct a technical and economic analysis and legal expertise of the polypropylene project.
The cost of this project is 2.6 billion US dollars, the capacity of the plant will be 500,000 tons of polypropylene per year.
The polypropylene production project is currently being implemented by Samruk-Kazyna National Welfare Fund, in particular the EPC contractor has been identified, debt financing has been raised, and construction work has begun. The construction completion date is 2021.
For reference: Borealis is one of the top 4 largest polyethylene producers in the world, being one of the most high-tech and high-margin companies. Shareholders of Borealis are Mubadala (UAE) - 64% and OMV (Austria) - 36%.
Press service of the Ministry of Energy of the Republic of Kazakhstan