KMG, SIBUR, and Sinopec Sign Shareholder Protocol for Silleno Project

On July 2nd, at the 7th meeting of the Kazakh-Chinese Business Council in Astana, significant strides were made as NC KazMunayGas JSC (KMG), SIBUR Holding PJSC, and Sinopec Overseas Investment Holding inked a pivotal Shareholders Protocol for the "Silleno" project. This landmark agreement signals the commencement of Kazakhstan's maiden integrated gas chemical complex, aimed at polyethylene production. Set to be located in the Atyrau region, the facility boasts a robust capacity of 1.25 million tons. This strategic collaboration underscores the partners' commitment to advancing Kazakhstan's industrial capabilities and fostering economic growth through innovative chemical manufacturing solutions.

The protocol underscores the parties' commitment to finalizing the investment budget for the "Silleno" project. Signatories included Askhat Khassenov, Chairman of the Management Board of NC KazMunayGas JSC; Mikhail Karisalov, Chairman of the Management Board and CEO of SIBUR LLC; and Yongsheng Ma, Chairman of the Board of Directors of Sinopec.

Additionally, the protocol emphasizes a strategic focus on maximizing Kazakhstani content in project design, equipment procurement, and construction, ensuring alignment with economic and technical feasibility considerations.

This initiative marks a pivotal advancement for the petrochemical sector, anticipated to catalyze a 1.2% GDP growth and foster new opportunities for SMEs in polyethylene product manufacturing. Investment in the petrochemical industry traditionally generates a substantial economic multiplier effect, with every dollar invested resulting in an estimated economic boost of 2-3 dollars.

The project is expected to create approximately 8,000 new jobs during the construction phase and an additional 800 positions during plant operations. Polyethylene, a versatile polymer indispensable in various sectors including construction, automotive, medical, and packaging industries, underscores the strategic significance of this development for Kazakhstan's industrial growth and economic diversification.

National Company KazMunayGas JSC (KMG) stands as Kazakhstan's premier vertically-integrated oil and gas enterprise, overseeing operations spanning the entire hydrocarbon production cycle, from exploration and extraction to transportation, refining, and specialized services. Established in 2002, KMG plays a pivotal role in Kazakhstan's petroleum sector.

SIBUR Holding PJSC (SIBUR) is a rapidly advancing force in the global petrochemical arena and Russia's foremost producer of polymers and rubbers. Their involvement in the Polyethylene project was formalized in March 2023, marking a significant step in their strategic expansion.

Sinopec, a vertically integrated energy and petrochemical giant and the world's second-largest chemical company after BASF, joined the project in March 2024, reinforcing its global footprint in the industry.

Sileno LLP serves as the operator for the second phase of constructing Kazakhstan's inaugural integrated gas chemical complex, located in the Atyrau region (known as the Polyethylene Project). The project operates within the special economic zone "National Industrial Petrochemical Technopark," highlighting its strategic positioning within Kazakhstan's industrial landscape.