KMG, Sibur, Sinopec sign protocol for PE project in Kazakhstan

KMG, Sibur, Sinopec sign protocol for PE project in Kazakhstan

KazMunayGas JSC (KMG), Sibur Holding PJSC and Sinopec Overseas Investment Holding have signed a protocol on the Silleno project. The polyethylene (PE) project involves the construction of a production plant with a capacity of 1.25 million tonnes/year in the Atyrau region in western Kazakhstan.

The estimated cost of the project is US$7.7 billion and it is expected to be completed in 2028. KazMunayGas owns 40%, Sibur – 30%, Sinopec – 30% in the project.

“The parties confirmed their intention to agree on the final investment budget for the implementation of the Silleno project. The protocol reflects the commitment of the parties to ensure the highest level of local content in the field of design, procurement of equipment and materials, as well as construction during the implementation of the project, taking into account economic and technical feasibility,” KMG said.

“The polyethylene production project is an important stage in the development of the petrochemical industry. Its implementation will have a multiplier effect on the country’s economy, which is expected to lead to an increase in GDP by 1.2%,” it said.

In November 2022, the state fund Samruk-Kazyna, KazMunayGas, Sibur Holding and participants of the operating companies of the PE/PP petrochemical projects signed the main documents on the creation of joint ventures on the basis of Kazakhstan Petrochemical Industries and Silleno LLP.

In May 2023, an agreement was signed on the entry of the Chinese petrochemical firm Sinopec into the PE project as a full partner, and in April 2024 the company officially became a co-founder.

KazMunayGas JSC (KMG) is Kazakhstan’s leading vertically-integrated oil and gas company. KMG is managing assets throughout the entire production cycle, ranging from exploration and production of hydrocarbons to transportation, refining and provision of specialised services. The company, founded in 2002, represents Kazakhstan in the country’s petroleum sector.