Kazakhstan Petrochemical Industries Inc. Limited Liability Partnership is the operator of investment strategic project Construction of the First Integrated Gas Chemical Complex in the Atyrau Region (phase I, polypropylene production).

Location: Atyrau

Implementation period: 2008-2022

Participants: UCC LLP (99%), Firm Almex Plus LLP (1%)

General contractor: China National Chemical Engineering Co. (CNCEC, PRC).

Project overview

The Project is implemented under the Kazakhstan Petrochemical Industry Development Program for 2008-2013 with the aim to use the large available volumes of gas from the Tengiz field as feedstock for the Complex to produce petrochemical products with high added value for further sale in the domestic and export markets.

The Complex is 33 km to the northeast of Atyrau and 8-9 km to the north of the Karabatan station. One of the important factors for KPI is the location of the plant with better logistics for the key sales markets: Turkey and China. These countries are the world’s largest net polypropylene importers. Furthermore, the prices for the procured propane will be lower than the market ones. Propane transportation costs are also reduced considerably as the plant is not far from the Tengiz field.

The new player in the world arena of polymer production and sale will first of all have a positive effect for consumers in terms of diversification of feedstock suppliers, added brand assortment and alternative shipping routes.

Construction of the Polypropylene Complex is the first stage in setting up a petrochemical cluster in the Atyrau region to be followed by output of hi-tech basic industry products.

The Project includes use of modern world-class technologies for deep propane processing to get a commercial product - polypropylene.

Capacity of the complex: 500,000 tons of polypropylene per year. The applied technology allows to produce up to 64 grades of homopolymers. Each group of grades is designed for specific purposes, such as packaging production, medicine, car manufacturing, pipe and component production, electric engineering, i.e. practically all daily consumption goods contain polypropylene in various amounts.

In June 2018, Samruk-Kazyna JSC resolved to hand over the Project to JSC NC “KazMunayGas” for trust management

Value of the EPC contract: 1,865 million US dollars.

Financing: a loan from China Development Bank (PRC) - 2.0 billion US dollars, including interest of 135 million US dollars.

Personnel: at the stage of construction and assembly works - up to 4,000 people, during operation - 550 people.

Unique project

The plant of such level is commissioned in the Republic of Kazakhstan for the first time.

Uniqueness of the complex:

Use of advanced propane dehydrogenation and propylene polymerisation technologies from the Licensor, Lummus Technology, with the maximum product output and minimum energy consumption;

Use of process equipment from global manufacturers;

Introduction of digital solutions to manage processes, warehouses, production and repair planning with exclusion of the human factor.

All this will have a positive effect on the cost of finished products and, as a consequence, its price for end consumers.

Community and environment

Kazakhstan Petrochemical Industries Inc. LLP is expanding the Kazakh content in the project implementation. For the first time in the history of implementing a major technologically complex investment project, an order for critical equipment (propane and propylene splitter) was fulfilled by a local plant AtyrauNefteMash. Tanks and vessels and heat-exchange equipment was manufactured by Sewon Vertex LLP (Aktau) and Petropavlovsk Plant of Heavy Machine Building JSC (Petropavlovsk). Metal structures were supplied by companies from Kazakhstan - Imstalcon, TemirtauKazMekhanoMontazh, BatysStroyService, Isker, PSI-Group, Petropavlovsk Plant of Metal Structures and others, steel pipelines - by ArcelorMittal (Aktau), polyethylene pipes - by Atyrau Plant of Pipeline Fittings Chevron Munaigas Inc.

Construction materials are delivered by rail cars of the national carrier, NC Kazakhstan Temir Zholy JSC. A Kazakh logistics company experienced in major investment projects, including TCO, Kashagan, Karachaganak, Gas Turbine Power Plant, Aktogai Mining and Processing Plant and other projects, is engaged for cross-border shipments. National Kazakh carrier NMSC Kazmortransflot JSC is engaged to deliver large-size equipment by sea from Black Sea ports to Caspian Sea ports.

33 of 36 subcontractors operating at construction sites are local.

Training and internship for young specialists at enterprises and in educational institutions have been planned to prepare the operating personnel. Cooperation is currently maintained with local and foreign universities and colleges, such as Utebayev Atyrau University of Oil and Gas and АPЕC Petro Technic Higher College LLP. The company’s employees are engaged in development of education programmes, education plans and are members of attestation committees at state examinations and thesis defence.

It should be noted that the feedstock for the complex is the propane already cleared of harmful impurities, which is converted into propylene through the production chain and then into polypropylene using processes excluding formation of harmful hazardous substances, such as hydrogen sulphide, sulphur dioxide, aromatic hydrocarbons, etc.

Secondly, the complex is environmentally friendly in terms of water consumption as water consumption is minimised owing to a closed cycle of recycling water supply for the processes in integration with Karabatan Utility Solutions LLP’s complex of treatment facilities, where almost 100% wastewater is recycled and reused.

Current status:

The overall progress is 98.5%.

General construction works are currently completed at the site, the general contractor has completed equipment supply and installation.

Pre-commissioning is underway: electricity has been received by the substations, as well as water, dry air and nitrogen, natural gas and high-pressure steam. Hydraulic and air leak testing of pipelines, individual testing of rotating equipment is carried out. The steam collectors are blown with high pressure steam.

Commissioning has begun: preliminary drying of the lining of the propane dehydrogenation reactors and regeneration air heating furnaces has been carried out, the flare has been ignited, the boiler plant and railway infrastructure have been put into operation. Propane has been supplied to the feedstock tanks.

A thorough check, set-up and preparation for launch of all process unit systems are carried out as part of commissioning. This stage of the Project is critical and ensures the successful phased start-up and operation of the units in line with the process flow.

Atyrau Refinery LLP (AR) is currently implementing the TAZALYQ Project designed to improve the environmental situation in the city of Atyrau. The Project envisages the introduction of modern wastewater treatment processes that provide for the reduction of pollutants discharged with wastewater and termination of pollutant evaporation into the atmosphere.

Location: Atyrau

Implementation period: 2019–2023

Participants: AR (100%)

Contractor: NefteStroyService Ltd LLP, Centre-Kotlo-Service LLP

Project overview:

According to the design solutions, wastewater generated by the refinery will undergo two-stage treatment in new mechanical facilities and then in the existing biological treatment facilities. A portion of the treated wastewater will be immediately recycled to the refinery, and the other wastewater will be discharged via a new pipeline to the public treatment facilities which are currently being constructed. After the subproject for the upgrade of mechanical treatment facilities is implemented, some 15% of the total wastewater is also planned to be returned to AR’s production process as reused water.

Then evaporation fields are to be reclaimed and dewatered. AR is also renovating the effluent channel which provides for the construction of a pipeline instead of the open ground channel that will be connected to the municipal sewage treatment facilities. On the average, AR discharges some 4 million cubic metres of water to the evaporation fields per year.

Basic design solutions

The Project provides for the following works at the technical stage of reclamation:

• Installation of two separation dams for sectors 2, 3, 4 and construction of one protective dam for sector 1 from municipal evaporation fields
• Dewatering of those areas of the evaporations fields that are filled with wastewater
• Cane cutting
• Ploughing of the evaporation fields
• Levelling of the evaporation fields with a motor grader
• Biological treatment of soil from oil contamination
• Three-time cultivation of the areas.

Impact on the community and environment

The Project implementation complies with the requirements of RoK government authorities and is carried out in accordance with the state environment improvement programs.

The Project is designed to liquidate open reservoirs, remove accumulated waste, achieve the quality of wastewater treatment to meet the standards, and ensure the stable operation of biological treatment facilities. After the Project is completed, the following results will be achieved:

• Increased volume of recycled treated wastewater per year from 0% to 15% (from 0 m³ to 600,000 m³).
• Reduced water intake from the river Ural per year by 9% (from 7,100,000 m³ to 6,500,000 m³).

The Project will create 182 temporary jobs during construction. Local companies will be engaged to perform design and survey work and provide designer supervision services.

The Project will bring a number of social and economic benefits, including

• Termination of wastewater discharge to the evaporation fields
• Improvement of the environment of Atyrau and the health of its residents thanks to the use of the best wastewater treatment methods and start-up of new municipal treatment facilities
• Achievement of strategic goals for wastewater management in Atyrau.

AR periodically updates the community on the Project status via news websites and AR’s Internet resources and holds regular meetings with public organisations and mass media representatives.

An individual Stakeholder Engagement Plan (SEP) has been developed for the Project. AR will be implementing the SEP at all the Project stages. The activities under the SEP include disclosing relevant information on the Project, taking note of, reviewing and addressing the issues of concern to communities. The Plan also envisages the establishment and functioning of a complaint and appeal procedure at AR in connection with the Project implementation. The procedure will enable external stakeholders, especially the local population, to file Project related complaints and appeals and have them addressed.