Nizhnekamskneftekhim (NKNK), one of Russia’s leading petrochemical producers, has hired Denmark’s Haldor Topsoe for licensing and engineering services at a new methanol unit.
The proposed facility at NKNK’s Tatarstan production hub is slated to produce 500,000 tpy of methanol, which will be used to manufacture formaldehyde. The formaldehyde, in turn, will serve as feedstock in the production of isoprene.
Neither NKNK nor Haldor Topsoe has reported a timeframe for the methanol unit’s construction. The value of their contract has also been kept under wraps. However, NKNK noted that the project would help make isoprene production more efficient and cheaper. It signed a second contract last week with the Research and Design Institute of Urea and Organic Synthesis Products (NIIK), based in Nizhny Novgorod, for the facility’s design.
NKNK, a subsidiary of Russia’s TAIF industry group, is among a number of Russian petrochemical producers preparing to expand their operations and take a larger slice of the global market. The company intends to complete a second production train at its Tatarstan hub in 2024, doubling its annual ethylene capacity to 1.2 million tpy. Germany’s Linde secured a turnkey contract for the project in 2017. A third, 600,000 tpy train is expected to be added in 2030.
NKNK has reached out to international investors to bankroll these plans. In May last year it signed a long-term loan agreement worth 807 million euros (US$922 million) with Germany’s Deutsche Bank, Bayerische Landesbank, Landesbank Baden-Wuerttemberg and DZ Bank, as well as Italy’s Unicredit. In December, it also raised 15 billion rubles (US$222 million) from a bond placement on the Moscow stock exchange. The 10-year bonds were sold at a coupon rate of 9.75%.
Meanwhile, TAIF is constructing a new heavy residue deep conversion complex (HRCC) at its Nizhnekamsk oil refinery, located near to NKNK’s petrochemical plant, in order to produce Euro-5 diesel and gasoline.
Russia’s Gazprom, Lukoil, Rosneft and Sibur are also hoping to launch new petrochemical capacity before 2030. Russia is seen as having a competitive edge in the sector thanks to its ample supplies of cheap oil and gas feedstock, though at present it only accounts for 1% of global output.