BEIJING—Chinese energy and chemicals major China Petrochemical Corp. (Sinopec) is to become a strategic investor in Sibur, the Russian gas processing and petrochemicals company.
The ‘framework investment agreement' was announced on Sept. 3 during a state visit by Russia's President Vladimir Putin to China. The deal requires approvals by corporate governing bodies and regulators.
The move is intended to increase the companies' existing strategic cooperation and their market positions and strengthen relations between China and Russia, said the official statement. It did not detail the scale of Sinopec's planned investment in Sibur.
Sibur's vertically-integrated upstream and petrochemicals business model is complementary with Sinopec's businesses, according to Wang Yupu, chairman of Sinopec.
“This transaction is in-line with our objective to strategically expand our petrochemical business overseas,” he said. “Our continued partnership will help diversify and secure Sinopec's long-term sourcing of petrochemical products.”
For Sibur, chairman Leonid Mikhelson commented, “this transaction with Sinopec is a clear signal of confidence from a global energy and chemical industry leader in SIBUR's high quality asset base and future growth potential.
“We are excited to have Sinopec as our strategic shareholder, whose participation will reinforce Sibur's expertise to maximize the efficiency of new large-scale projects and raise the company to a new level”.
In the rubber sector, Sibur and Sinopec are currently at the design stage of a joint venture acrylonitrile butadiene rubber (NBR) plant in Shanghai, China. The unit is expected to have a capacity of 50 kilotons-per-annum.
Sinopec is to take 74.9 percent ownership in the rubber joint venture with Sibur having the remaining 25.1 percent share
In 2013, Sibur and Sinopec set up a JV in Russia, Kransoyarsk Synthetic Rubber Plant, with a capacity to produce 42.5ktpa of nitrile rubber (pictured).
It is planned, that the new plant, like the Russian facility, will also feed growing demand for NBR in China and South East Asia.