MOSCOW (MRC) -- Amur Gas Chemical Complex LLC, hereinafter “Amur GCC”, has agreed and signed loan documents to finance the completion of Amur GCC’s construction, reported PRIME with reference to SIBUR's press release.
Amur GCC will act as the borrower; SIBUR and Sinopec will be sponsors proportional to their stakes (60/40, respectively) in the joint venture (JV).
Upon completion of standard conditions precedent, AGCC will begin to draw on the loan which will total USD USD9.1bn and has a final maturity of 2035. Project costs in excess of USD 9.1bn will be covered by the JV parties pro rata.
The credit facilities are provided by international banks under coverage from Italian (SACE) and German (Euler Hermes) export credit agencies and also from Chinese and Russian banks on a commercial basis. The total amounts of ECA-backed and commercial credit facilities will equal USD 2.6 bn and USD 6.5 bn, respectively.
Peter O'Brien, member of the Management Board and Managing Director for Economics and Finance at SIBUR, said: “SIBUR continues to demonstrate proven expertise in raising competitively priced capital for large-scale investment projects. With financing secured, the construction of Amur GCC, one of the world’s largest polymer production facilities, will continue towards completion on schedule. The project is set to contribute much-needed additional supply of polyethylene and polypropylene to global markets to address the needs of modern consumers.”
As MRC reported earlier, SIBUR and Sinopec closed the deal to create a JV based on Amur GCC in late December 2020. As a result of the deal, the parties obtained joint control over the JV in shares of 60% and 40%, respectively.
SIBUR is implementing an Amur GCC project for processing ethane fraction and liquefied petroleum gases (LPG) at Gazprom's Amur GPP.
The capacity of the Amur GCC, as the future world's largest complex for the production of base polymers, will be 2.7 mln tons per year: 2.3 ml tons of polyethylene (PE) and 400,000 tons of polypropylene (PP). The complex's products will be represented by a wide range of grades. The construction of the complex is synchronized with the gradual reaching full capacity of Gazprom's Amur GPP. The approximate time frame for completion of construction and commissioning is 2024.
Due to the geographic location of the complex, Amur GCC's products will be focused on Asian markets, primarily the Chinese market, the world's largest consumer of polymers. It is expected that the project for the construction of Amur GCC can be included in the intergovernmental agreement between the Russian Federation and China.
SIBUR reported that Amur GCC's budget is tentatively estimated at USD10-11 bln and will be updated during its implementation.
It was also reported that last December, SIBUR Holding chose Spheripol LyondellBasell polyolefin technology for its Amur GCC under construction. The technological process will be used at the PP plant with a capacity of 400,000 mt/year, which will be built in the town of Svobodny, Amur Region.
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,868,160 tonnes in the first nine months of 2021, up by 18% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 1,138,510 tonnes in the first nine months of 2021, up by 30% year on year. Supply of propylene homopolymer (homopolymer PP) and block-copolymers of propylene (PP block copolymers) increased, whereas supply of injection moulding PP random copolymers decreased significantly.
Sinopec corp. is one of the world's largest integrated energy and chemical companies. Business Sinopec Corp. includes oil and gas exploration, production and transportation of oil and gas, oil refining, petrochemical production, production of mineral fertilizers and other chemical products. In terms of refining capacity, Sinopec Corp. ranks second in the world, in terms of ethylene capacity - fourth.
SIBUR Holding is the leader in the Russian petrochemical industry and one of the largest global companies in the sector with over 23,000 employees. Over the past 10 years, SIBUR has implemented a number of large-scale investment projects worth about Rb1 trillion.
MRC