SIBUR and TNK-BP sign strategic partnership agreements

SIBUR, the leading petrochemical company in Russia and Eastern Europe, and TNK-BP, Russia’s third largest oil producer, signed a set of strategic partnership agreements including the indefinite extension of the Yugragaspererabotka joint venture. Under the terms of the agreements, the two companies will join forces in the production, processing, and use of hydrocarbon feedstock; aside from these, all contracts related to the Yugragaspererabotka joint venture will be extended until the end of 2026. The partnership also provides for Sibur’s acquisition of a 25% stake in TNK-BP’s Zaykinsky Gas Processing Plant (GPP) in 2013, after the modernization and construction program of the plant has been completed. Zaykinsky GPP will operate as a standalone joint venture under the management of the two companies. Sibur and TNK-BP will invest in production capacity expansion, as well as equipment upgrades. Negotiations are also ongoing for Sibur’s purchase of the propane/butane mix which would be produced within TNK-BP’s Rospan project. The contracts provide for TNK-BP’s expanded use of SIBUR’s fuel components and other petrochemicals. “We are excited about the future partnership, especially considering the successful track record of our Yugragaspererabotka JV,” said Leonid Mikhelson, SIBUR Holding’s chairman of the board of directors. “SIBUR is consistently focused on expanding its resource base by using both associated petroleum gas and by-products of natural gas processing, which are increasingly involved in our petrochemical operations. The project demonstrates the commitment of SIBUR and TNK-BP to address national priorities of deep hydrocarbon processing in Russia.” (July 25, 2012)