Sinopec, one of China’s leading state-owned oil and petrochemical companies, has recently entered into an equity agreement with Kazakhstan’s state-owned oil and gas firm, KazMunayGas JSC (KMG), to secure a 30% stake in an upcoming polyethylene project located in Kazakhstan. This significant development was officially confirmed by Sinopec in a statement released on Tuesday.
The groundwork for this collaboration had been laid earlier in May this year when the companies had initially established the “key terms” for the project during discussions held on the sidelines of the China-Central Asia summit.
Situated in the Atryau region of western Kazakhstan, the polyethylene project boasts a designed annual production capacity of 1.25 million tons, according to the statement provided by Sinopec.
The financial commitment for the project is reported to amount to $7.7 billion, as stated by the Kazakh state news agency, Kazinform, in their report on Tuesday.
This announcement coincides with the visit of Kazakh President Kassym-Jomart Tokayev to Beijing, where he participated in the Belt and Road Forum. During this event, President Tokayev held discussions with China’s President Xi Jinping, with a focus on further enhancing their cooperation in the realms of investment and trade.
Chairman Ma Yongsheng of Sinopec has articulated the company’s intention to commence construction of the polyethylene plant in the latter half of 2024, as reported by Kazinform.
In addition to the equity agreement for the polyethylene project, Sinopec and KMG have also inked a pre-feasibility joint development agreement, with the objective of exploring the possibility of investing in the construction of PTA (phthalic acid) and PET (polyethylene terephthalate) plants within Kazakhstan, as detailed in Sinopec’s statement.
It’s noteworthy that all three major Chinese state-owned oil corporations, namely Sinopec, PetroChina, and CNOOC, have previously invested in Kazakhstan’s oil and gas sector. PetroChina, for instance, is part of the consortium currently involved in the development of the Kashagan field in the Caspian Sea, which stands as Kazakhstan’s second-largest producing field, alongside prominent Western oil companies and KMG.