KazMunayGas and Tatneft Set Up Butadiene Rubber Joint Venture
On 30 November 2021, Alik Aidarbayev, Chairman of the Management Board of JSC NC “KazMunayGas”, and Nail Maganov, General Director of Tatneft PJSC, signed an Agreement on Butadiene LLP Joint Venture to be the basis for implementation of a rubber production project.
The enterprise’s planned capacity will reach up to 180 thousand tonnes of butadiene and butadiene rubbers per year. The shares of KMG and Tatneft are 25% and 75%, respectively. The project is preliminarily estimated at about 1 billion US dollars, and the parties are considering options for financing the project, including through borrowed funds.
The production is scheduled to be launched in 2026 in the territory of the National Industrial Petrochemical Technopark Free Economic Zone in Atyrau region. About 2,000 jobs will be created at the site during the facility construction, and over 700 jobs — during the facility operation.
Raw materials are supposed to be supplied from Tengiz and Korolev fields in Kazakhstan. The finished products are planned to be supplied to the tyre factory in Karaganda region and exported to Europe, Russia, China, Turkey, etc.
“In accordance with the Development Strategy, our company seeks to expand the value chain of its products and is actively developing the petrochemical industry in the Republic of Kazakhstan. This is evidenced by the setting up of a joint venture between KazMunayGas and Tatneft. I am sure that the project will contribute to arranging a partnership between Kazakhstan and Tatarstan, and will also diversify the economy of our country,” Mr. Aidarbayev noted.
“Tatneft has big plans in the petrochemical industry, and we are happy to develop this area together with our Kazakh partners. Kazakhstan is a strategic partner for us. We already have the collaborative experience, as we are also taking joint efforts to construct the tyre factory in Karaganda region. This is the practical implementation of the Strategy for Economic Integration of the Member Countries of the Eurasian Union. We have assured ourselves once again that Kazakhstan had created the most comfortable conditions for the implementation of large-scale investment projects I am confident that the new joint venture for the production of butadiene rubbers will contribute to strengthening the economies of our countries and the well-being of our people,” Mr. Maganov emphasised.
It should be recalled that KazMunayGas and Tatneft signed an agreement on the basic terms of cooperation under the Butadiene project on 5 April 2021. On 28 April 2021, the companies signed a project roadmap and a framework agreement.