Butadiene JV: Tatneft & KazMunayGas sign agreement

Russian oil and gas company Tatneft and Kazakhstani state-owned oil and gas company KazMunayGas have officially commenced a joint venture to produce butadiene rubbers with the signing of a corporate agreement by Nail Maganov, general director of Tafnet, and Alik Aidarbayev, management board chairman of KazMunayGas. The agreement follows the signing of an agreement earlier this year that set out the basic terms of the project as well as a roadmap for its implementation, a framework agreement and an agreement on an action plan for cooperation.

According to the partners’ plans, the Butadien LLP joint venture will launch in 2026 and be located within the Special Economic Zone National Industrial Petrochemical Technopark in Kazakhstan’s Atyrau region. The partners estimate the project’s preliminary cost at approximately US$1 billion and they are considering options for financing the project, including through borrowed funds. Tatneft will hold a 75 per cent stake in the joint venture and KazMunayGas the remainder.

Planned capacity is up to 180,000 tonnes of butadiene and butadiene rubbers annually. Tatneft expects that raw materials required for the production process will be supplied from the Tengiz and Korolev fields in Kazakhstan. The partners intend to deliver plant output to a tyre manufacturing facility in Kazakhstan’s Karaganda region and also export to European countries as well as destinations such as Russia, China and Turkey.

The project will create approximately 2,000 jobs during the construction stage and more than 700 when the plant enters operation.

Big plans in petrochemistry

“Tatneft has big plans in petrochemistry, and we are happy to develop this area together with our Kazakh partners,” states Tatneft’s Nail Maganov. “Kazakhstan is a strategic partner for us. We already have the collaborative experience, as we now also apply joint efforts in the construction of the tyre manufacturing factory in the Karaganda region, and this is the practical implementation of the strategy for the economic integration of the countries – members of the Eurasian Union.

“We have assured ourselves once again that Kazakhstan has created the most comfortable conditions for the implementation of large-scale investment projects. I am confident that a new joint venture for the production of butadiene rubbers will contribute to strengthening the economies of our countries and the well-being of our people.”

Alik Aydarbayev adds: “In accordance with the Development Strategy, our company seeks to expand the value chain of the company’s products and is actively developing the petrochemical industry in the Republic of Kazakhstan. Establishment of a joint venture between KazMunayGaz and Tatneft is the evidence of this. I am sure that the project will contribute to the establishment of partnership relations between Kazakhstan and Tatarstan and will also diversify the economy of our country.”