Borealis has signed an agreement with United Chemical Company (UCC) to develop an ethylene/PE complex in Kazakhstan. The project will comprise an ethane cracker and two PE plants based on Borealis’ Borstar technology. The PE plants will have a total capacity of 1.25 million t/y.  Ethane for the cracker, which will be designed for future expansion, will be sourced locally.

The joint development agreement follows the successful conclusion of a pre-feasibility study. The project will now move into the feasibility study phase, which is expected to run until the first quarter of 2019. At that time, once the project’s parameters have been confirmed, the companies will form a local joint venture.

A final investment decision on the project is expected to be taken in 2020 with start-up scheduled in 2025. The potential investment costs were not disclosed, but are expected to be in the range of several billion dollars.

“The project is well aligned with the country’s strategy to develop its petrochemical industry and would serve as a strong basis for establishing Kazakhstan on the global polyolefin market,” said Samruk-Kazyna CEO, Akhmetzhan Yessimov.

Mark Garrett, CEO of Borealis, added that the project would significantly strengthen Borealis’s position in the CIS markets, where growth rates are above those in Western Europe and offer significant potential for developing its advanced PE business based on Borstar technology.

At the same time, a Memorandum of Understanding (MoU) was signed to cooperate on a 500,000 t/y PP project that is currently under construction. This project is being implemented by the Samruk-Kazyna Sovereign Wealth Fund, of which UCC is a wholly owned subsidiary.

Last December, US contractor CB&I received the go-ahead from Kazakhstan Petrochemical Industries to provide project management services for the PP plant along with a propane dehydrogenation (PDH) unit in the western Atyrau region of Kazakhstan. CB&I will supply its Novolen gas-phase process for the PP plant and its Catofin technology for the PDH unit.