|
There Will Be Own Methanol In Mid Urals19.03.2010 — Analysis In Nizhniy Tagil, the Sverdlovsk Oblast, there will be built a gas chemical integrated plant producing methanol. The initiator of the project is OAO Uralchimplast, the company that is going to process some of the product and export the rest. The RusBusinessNews observer found out that a difficult fate awaits the project since Russian methanol may not withstand the Middle East competition. The experts tie the future of the gas chemicals with the development of the domestic market. A 50/50 joint venture Uralmethanolgroup founded by Uralchimplast and OGC Itera will be implementing the project. At the first stage the production facility with the capacity of 600 thousand tons of methanol per year will be established, 13 billion of own and borrowed money is planned to be spent on this. The second stage envisages the expansion of the production facility, construction of an automotive road and warehouses. The development of infrastructure, according to Yelena Drozdova, the OAO Uralchimplast Public Relations Office Manager, will require State guarantees for 1.5 billion roubles. The Russian Government has already allotted 281 million roubles for the reconstruction of biological treatment plants. In the future Uralchimplast is planning the establishment of a chemicals cluster built around joint ventures with companies Kronospan, Cavenaghi SPA, Amdor, specialising in the production of resins for foundry operations, chemical reagents for road construction sector, anticorrosion inhibitors used in oil industry, binding materials for timber processing sector. The details of organisation of the future industrial park have not yet been made public, according to Ms Drozdova, the calculations only have been made for the first stage. The produced methanol will be used internally as it is a raw material in the production of synthetic resins and some of it is planned to be exported. Experts, however, assessed the Uralchimplast plans with some reserve. According to Tamara Khazova, the Director of Analysis Department at CREON, methanol producing capacities were only used at 50% in 2009. Gas chemical plants in the USSR initially were aimed at export markets, up to a half of methanol made in the country was exported. The 2008 crisis has brought the industry a great damage, Europe has cut down the consumption, prices dropped, and the Russian product could not compete with that from the Middle East. The railway transportation tariffs have aggravated the situation, having cut off the plants located in the middle of Russia from export markets. The Persian Gulf countries began increasing the production and Russians accumulated excessive unwanted methanol. There are three large enterprises dominating the sector: JSC Metafrax (the Perm Oblast) and JSC Togliattiazot producing a million tons each, and Tomskneftekhim LLC with 750 thousand tons of methanol per year. Together with small enterprises they supply the market with about 3.5 million tons. The consumption in Russia, according to the data provided by the producers, amounts to about 1.2 million tons. The statements about the establishment of new capacities for the production of methanol in Nizhniy Tagil and in Tatarstan the Metafrax representatives perceive as the desire of the gas chemists to elbow in the already very competitive market. Experts see the future of the sector in the deep processing of methanol locally. According to Ms Khazova the additional volumes of methanol may be in demand for the production of carbamide-formaldehyde concentrates. the processing products are used in making furniture, timber housing construction, textiles etc. The problem is these industries are not at all well developed in Russia. Very large capital investments will be needed for the re-orientation of gas chemicals sector manufacturers for the domestic market. However, sooner or later investments into the realignment of the economy will have to be made. The situation cannot be treated as something usual when, having methanol in excess Russia imports polyethylene, polystyrene, and polypropylene for which ethanol is a raw material. Polymers are produces in the country, at the abovementioned Tomskneftekhim LLC for instance, but the range is very limited. At the same time some of the products are exported. It is obvious that in time Russian gas chemicals sector will re-orient for the domestic matket as polyethylene exports decline and imports continually grow. The process may be speeded up by the oil industry, the Russian President Dmitry Medvedev issued a directive to reach the 95% plank in the utilisation of the associated petroleum gas (APG). Implementing this programme oil and gas companies started purchasing plants for the conversion of APG into methanol which they need in their production operations. All this makes the situation for the leading gas chemicals enterprises even worse. Producers see the way forward in the deep processing of methanol locally. Metafrax, for instance, decided to process up to a half of their product for which the company jointly with Dynea started the construction of the plant for the production of carbamide-formaldehyde resins. The deep processing products may be demanded by both domestic and export markets. The Metaprocess group of companies and the Chinese Synthetic Fiber Producers and Consumers Association have recently signed a memorandum for the construction in the Khanty-Mansiysk Autonomous Okrug of a facility for processing of associated gas into raw materials for the production of polyester fibre. Zheng Zhiyi, the Chairman of the Association, after signing the agreement made a statement that his country is interested in buying raw materials in Russia. The capacity of the plant will enable the processing of 700 million cubic metres of gas annually. The estimated cost of the first stage is 600 million Euro. Uralmethanolgroup also expects to attract foreign capital. The OAO Uralchimplast Public Relations Office, however, declined to comment on the issue of funding the construction of the gas chemicals complex in Nizhniy Tagil. This is likely du to the fact that it will be harder to find investors for the production of excess methanol than for capacities making polymers. Difficulties with methanol sales, however, are not stopping the proprietors of the joint venture; Ms Drozdova claims that this situation in the market will not affect the implementation of the project. Vladimir Terletski |
Regions | Project participants | Investment projects | Consulates and Trade Offices | News and Analysis | About the Project |
© RusBusinessNews, 2009. All rights reserved. Establishing a hyperlink to RIA RusBusinessNews is required for using any of the material published on this website. News and analytical reviews are translated into foreign languages by the TRANSLIT Translation Agency |
«Sum of technologies»® Web design Site promotion |