Petrochemicals in Russia: Overcoming the Obstacles
Russia’s petrochemicals industry is set to grow regularly by 4% in the coming years
“We envision the [petrochemicals] industry growing at a rate of more than 4% a year over the 15-year horizon. At the same time, the structure of consumption of petroleum feedstocks will change. We will keep our focus on the domestic market and continue to go into value-added products,” Anton Rubtsov, Director of Oil Refining and Gas Complex Department, Ministry of Energy of the Russian Federation.
Companies see low-tonnage chemicals as a way to diversify
“Part of our strategy is to diversify and partially switch to mid- and low-tonnage chemicals,” Darya Borisova, Member of the Board – Managing Director for Development and Innovations, SIBUR.
“The main strategic objective is to build up the non-fuel segment and diversify the product portfolio to be more secure in terms of markets and margins. Petrochemicals are a logical next step in this respect. However, large-tonnage petrochemicals... have become a competitive environment in recent years. While specialty chemicals remain fast-growing and scarce,” Mikhail Nikulin, General Director, Gazpromneft – Industrial Innovations.
High global demand for Russian petrochemicals
“The issue of supply via the Baltic and the Black Sea. The barriers created hit higher logistics costs for end consumers. Most of the world is interested in Russian products, so we need to work systematically. We are developing the railway and seaport facilities. We are working towards creating new channels, and it’s not just the East,” Anton Rubtsov, Director of Oil Refining and Gas Complex Department, Ministry of Energy of the Russian Federation.
Sanctions challenge Russian petrochemicals to develop their own technologies
“The challenges include the withdrawal of licensors, the lack of technical and technological support for facility commissioning and start-up, the withdrawal of partners, and the need to redesign and search for new partners and for new solutions to complete these projects. It is a revision of vendors that planned deliveries: switching from unfriendly to friendly countries,” Darya Borisova, Member of the Board – Managing Director for Development and Innovations, SIBUR.
“If we talk about promising things – both high-tonnage petrochemical production and low-tonnage chemicals – then we will have to substitute our own developments with solutions of Western licensors,” Mikhail Nikulin, General Director, Gazpromneft – Industrial Innovations.
“We have a problem that for some reason we do not talk about. All the technologies were foreign, and most of the equipment is also foreign. We cannot produce many items of this equipment: we do not know how to design it – the secret has been lost,” Anton Maximov, Director, Institute of Petrochemical Synthesis named after A.V. Topchiev of the Russian Academy of Sciences.
Reaching import substitution
“The risks are great: it is necessary that they are shared between the government and the company. Most of the risks should still be borne by the government in pilot plants. Even if one reaches the pilot plant stage, it is not a 100% probability that the technology will be realized,” Anton Maximov, Director, Institute of Petrochemical Synthesis named after A.V. Topchiev of the Russian Academy of Sciences.
“Consolidating the efforts of the industry and the government to form a unified register of industry orders is now more urgent than ever. No one but the government, represented by the Ministry of Energy and the Ministry of Industry, supported by the Ministry of Finance, will probably be able to split this responsibility within the industry and select the leader in the priority portfolio of projects that exist today, and select the leader company that will develop these projects in conjunction with a research institute,” Denis Deryushkin, Deputy General Director – Head of Analytical Center, Russian Energy Agency of the Ministry of Energy of the Russian Federation.
Cooperation between the companies and the government will help resolve the industry’s infrastructure and supply chain issues
“I think with the industry we need to think about the tools that the various intergovernmental commissions and agreements provide. In petrochemicals, I think there has been quite little attention paid to this,” Anton Rubtsov, Director of Oil Refining and Gas Complex Department, Ministry of Energy of the Russian Federation.
“For the industry to grow and develop, just as you need raw materials, technology, and equipment, it is important to develop consumption and processing within the Russian Federation. This means that our potential customers must have the financial, technological and sales capabilities not only in Russia, but also abroad, then this chain will be built,” Darya Borisova, Member of the Board – Managing Director for Development and Innovations, SIBUR.
Russia has every opportunity to create an ambitious national carbon regulation system, given the absorptive capacity of its forests and the existence of institutions that are able to engage effectively with representatives of different economic sectors. The majority of experts at the business breakfast on ‘Carbon Attack: Development Driver vs Risk of Discrimination?’ as part of Russian Energy Week 2021 agreed that any such system should incentivize businesses to reduce emissions and introduce new technologies, while reducing payments under the Carbon Border Adjustment Mechanism (CBAM) for Russian companies.
Intergovernmental agreement between Russia and Uzbekistan on cooperation in the field of nuclear energy usage for civilian purposes came into effect on Sunday, 1 April, according to the publication at the official website on legal information.