text: CIREC News :: -Cirec-
  CIREC News
  EU sanctions on Russian organic chemicals
  Russian Organic Chemical Trade Jan-Dec 2021
  EU Sanctioned
  A fifth round of sanctions on Russia was applied by the EU on 8 April, in which an extensive number of chemical products were listed in Annex XXIII. A full embargo on chemical trade would have been a more emphatic decision and clearer message to Moscow.
  From the trade data for 2021 shown opposite, the table signals which petrochemical and organic chemical products have been sanctioned and those hitherto excluded. Under the terms of the sanctions no new business with the EU area is permitted after 9 April and all current contracts need to be completed by 10 July. Another smaller group of products including pentaerythritol, boric acids, and lithium oxide were required to complete contracts by 16 April.
  Not all of the chemical products listed are traded with EU, but the sanctions have been formulated to affect supply chains in some form or another. On top of the logistical problems already being experienced in some product areas, shipping chemical products into Europe and having them accepted may become the exception rather than the rule. These sanctions are expected to impact severely on the Russian chemical industry in the next few months.
  Product groups affected by sanctions
  In the petrochemical sector propylene and benzene are excluded from the sanctions list, whilst butadiene, toluene, orthoxylene and paraxylene are included. Benzene for example is not included in the Annex published by the EU, but main derivatives such as caprolactam, phenol and styrene are included. Caprolactam exports from Russia go mostly to China and Taiwan with only small volumes going to the EU, whilst most of the phenol and styrene exports are delivered to European countries.
  It is mostly impractical to redirect phenol and styrene exports to other markets, at least in the short term, and so this may result in Russian producers reducing utilisation rates. Phenolic resins have been sanctioned affecting the wood industry in Russia, although formaldehyde and methanol are excluded and at least can continue trading with the EU if logistics allow. Isocyanates TDI and MDI are not sanctioned although polyurethane is listed reflecting how all supply chains are affected to some degree.
  Russian chemical production Jan-Feb 2022
  Russian Chemical Production
  Jan-Feb 22
  Production volumes in the mainstream Russian chemical industry were stable in the first two months in 2022, and it may also be the case that the March and April data does not change significantly. Ethylene production increased in the first two months from 739,200 tons to 774,700 tons whilst propylene declined from 522,500 tons to 518,400 tons.
  The production of polymers increased in Russia to 1.858 million tons in the first two months in 2022 from 1.765 million tons in January to February 2021, including a rise in polyethylene production from 589,000 tons to 610,000 tons in the first two months in 2022. More than half of the olefin and polyolefin production in Russia is undertaken by plants belonging to the SIBUR and TAIF groups which have now merged.
  Russian plants produced 290,000 tons of synthetic rubber in the first two months in 2022, versus 296,000 tons in 2021. In the base chemical sector Russian ammonia production stabilised at 3.4 million tons whilst caustic soda rose from 211,400 tons to 215,000 tons. Export data, if published, may start to give some indication of the problems that face Russian chemical producers. Methanol exports in March for example were down on pre-month targets with logistics affected by both self-sanctioning and destination routes blocked.
  Nizhnekamskneftekhim slower sales cause refinery shutdown
  Nizhnekamskneftekhim's petrochemical complex has faced difficulties in product sales to Europe from the end of February. As a result of problems with logistics the company has found itself building up sizeable inventories rather than reducing production volumes. In April the introduction of EU sanctions on Russian synthetic rubber has compounded the problems of sales. The slowdown meant that on 4 April Nizhnekamskneftekhim notified its holding company and main feedstock supplier TAIF-NK of the need to gradually cease reception of straight-run gasoline (naphtha) from the nearby oil refinery.
  Due to the overall importance of Nizhnekamskneftekhim's feedstock purchases in the refinery's sales mix TAIF-NK was forced to stop production.
  Alternative import-sources
  In addition to finding, it hard to procure certain speciality chemicals, It will not be possible to supply all types of polymers such as engineering, etc. Russia can either produce some of the affected chemical products itself or possibly buy from China, but for some products alternatives may prove difficult to replace at least in the short term. Some technical processes can be developed domestically but for certain processes copying is impossible. Some of the products that will be problematic to replace include esters of acrylic acid, methyl methacrylate, polyamide 66, polycarbonates, as well as methionine which is used to produce feed for birds and animals. Methionine imports are sourced mostly from Belgium. The textile industry, whose enterprises imported special chemicals for production, will also suffer.
  Since the invasion many Western companies announced their withdrawal from the Russian market and the cessation of investments. There are also difficulties with the sale of Russian products abroad due to sanctions and due to problems with payment and logistics.
  Although SIBUR took over Nizhnekamskneftekhim and Kazanorgsintez in 2021, the TAIF-NK refinery remained outside the deal. The refinery supplies Nizhnekamskneftekhim with about 1.3 million tpa of naphtha. Although the total refining capacity comprises 7.344 million tpa of oil, producing naphtha at the CDU VDU-7 unit is key to the operation. Thus, without demand from Nizhnekamskneftekhim means that the whole refinery has to stop.
  Logistics-VR Railways resumes Russian chemical shipments
  The Finnish railway operator VR Group is still operating in Russia through its subsidiary VR Transpoint but intends to gradually completely curtail cargo traffic over the next few months. Products such as methanol and paraxylene are still being delivered, although in less volume than before.
  Present EU sanctions do not impede the railway communication between the EU and Russia. The volume of rail traffic VR Transpoint in 2021 amounted to about 37 million tons of which around a third is transported between Finland and Russia. The termination of freight traffic contracts concluded between VR and its domestic customers must be carried out in the manner specified in the contracts and negotiated with the customers. VR's aim is to run down the freight traffic as quickly as possible, but it is expected that the process will take several months. There was some confusion for a few days at the end of March which stopped deliveries for a few days. By the end of March around 2,000 rail cars with various cargoes were held up on the Russian-Finnish border at through the Buslovaksaya railway station, located in the region of activity of the Vyborg customs on the Russian side. The resumption allowed the backlog to be cleared, but it is not clear how long Russian exporters will be able to use this route.
  SIBUR-Neftekhim-ethylene oxide and glycol expansion
  Reconstruction of the ethylene oxide and glycol units at Dzerzhinsk were being carried out by U company Scientific Design prior to the Russian invasion, but it is not clear if this contract will finish in the face of economic sanctions. ThyssenKrupp Industrial Solutions, operating at Dzerzhinsk, had provided the project documentation, and this involvement should be ending according to technology sanctions. Currently, the design of the plant under modernisation has been completed, the installation of pumping, capacitive and heat exchange equipment is being carried out. The installation of reactor and compressor equipment was intended to be connected to the current scheme of the plant during the maintenance outage scheduled for 2022, but now may face delays.
  Amur Gas Chemical Complex faces challenges
  Sinopec suspended its participation in the construction of the Amur Gas Chemical Complex in March, which is involves plans to invest up to $500 million in the jv project with SIBUR. Sinopec, which holds a 49% stake in the jv, took the decision after at least one of SIBUR's shareholders fell under Western sanctions and fears that its involvement could jeopardize other investments.
  As of the end of March, the overall level of readiness of the Amur Gas-Chemical Complex project was 37.8%, and for individual installations 43%. SIBUR claims that work continues whilst other reports that the 2.7 million tpa polyolefin project could now be frozen.
  The concept of the Amur Gas Chemical Complex was derived from the Russian Chinese gas agreement from 2014 and subsequent construction of the 4,000 km Power of Siberia gas pipeline from East Siberia to Shanghai. As a result of the pipeline Gazprom decided to construct a gas processing plant near Svobodny in the Amur Oblast, close to the Chinese border. SIBUR was persuaded to build a gas-chemical complex next to the gas processing plant to provide a full chain of production and an outlet for the ethane.
  SIBUR thus far states that it continues to cooperate with Sinopec. In March, China's foreign ministry summoned officials from three energy companies to review their business ties with Russian partners. The companies have set up task forces on Russia-related issues and are working on contingency plans in case of business disruptions and secondary sanctions.
  Irkutsk Polymer Plant-around 50% completed
  Irkutsk Oil Company's project Irkutsk Polymer Plant is around 50% completed and is amounts to the largest project in East Siberia. The objective of the plant is the monetization of significant volumes of associated petroleum and natural gas. The plant is under construction by Toyo Engineering, but it is not clear yet if sanctions will affect the project.
  In the future, the company plans to find an economically viable solution for the use of methane such as a project for the production of blue ammonia. In addition, the company has worked out a unique technology for the extraction of lithium from brines. It is planned that in 2025 the work of the inorganic chemistry plant will be launched where the production of lithium carbonate with a purity of 99.5% will be launched.
  EU sanctions against Russian LNG
  EU Sanctions on LNG technology sales to Russia
  Vacuum gas oil hydrocracking units
  Process units for gas cooling in the LNG-process
  Process units for the separation in the LNG-process
  Process units for the liquefaction of the natural gas
  In the fifth round of sanctions the EU banned the supply of equipment for the production of liquefied gas which may put an end to Russia's current plans to becoming one of the world's largest LNG producers. The implementation of the Arctic LNG-2 and Baltic LNG projects already under construction by Novatek and Gazprom is in question, since the ban also applies to concluded and paid contracts.
  Two LNG plants are currently under active construction in Russia: Gazprom's project at Ust-Luga for 13 million tpa and Novatek's Arctic LNG-2 for 20 million tpa. The Ust Luga project is only in the early stages and was dependent on the certification of Nord-Stream-2 which makes it likely to be frozen. Construction of the petrochemical complex at Ust Luga had only just started, and some foundations may continue to be laid but there limitations on how far the project can go without political changes. As regarding Novatek's Artic LNG-2, construction is at a more advanced stage and may achieve some partial completion. 2023 was set as the start-up date, but this is already subject to delay.
  Russian ethylene production, Jan-Feb 22
  Russian Ethylene Production (unit-kilo tons)
  Novokuibyshevsk Petrochemical
  Russian ethylene production totalled 774,700 tons in the first two months in 2022 against 739,200 tons in the same period in 2021. ZapSibNeftekhim at Tobolsk produced 247,200 tons in January to February 2022 up from 233,200 tons in 2021. Nizhnekamskneftekhim produced 104,800 tons of ethylene against 105,800 tons in 2021 whilst Kazanorgsintez dropped from 112,400 tons to 94,600 tons.
  Other important ethylene producers included SIBUR-Kstovo which produced 66,300 tons versus 65,900 tons. In Bashkortostan Gazprom neftekhim Salavat produced 61,200 tons against 376,400 tons, whilst Ufaorgsintez increased production from 14,900 tons to 96,100 tons. Stavrolen at Budyennovsk reduced ethylene production to 57,000 tons against 56,100 tons in the first two months in 2021.
  EU sanctions on Russian monomers
  EU sanctions on Russian monomers (8 April 2022)
  The EU introduced sanctions on 8 April, as part of its fifth round against Russia for its invasion into Ukraine. The list included butadiene, styrene and ethylene oxide, but did not include ethylene and propylene.
  Russian propylene production, sales and exports, Jan-Feb 22
  Russian Propylene Production (unit-kilo tons)
  SIBUR Kstovo
  Russian propylene production amounted to 518,400 tons in the first two months in 2022 against 522,500 tons in the same period in 2021. The combined ZapSibNeftekhim and SIBUR Tobolsk plants reduced production from 227,000 tons in the first two months in 2021 to 1.188 million tons in 2021.
  In Tatarstan Nizhnekamskneftekhim produced 54,500 tons of propylene in the first two months in 2022 against 53,200 tons in 2021 whilst Kazanorgsintez increased production from 7,800 tons to 9,400 tons.
  In Bashkortostan Gazprom neftekhim Salavat produced 28,000 tons versus 27,200 tons whilst Ufaorgsintez reduced production from 29,900 tons to 29,000 tons. In the Nizhny Novgorod region SIBUR-Kstovo increased production of propylene from 29,600 tons to 30,300 tons in 2021. Lukoil-NNOS at Kstovo increased production from 29,200 tons to 58,600 tons.
  Russian Propylene Exports (unit-kilo tons)
  Russian Propylene Domestic Sales (unit-kilo tons)
  ZapSibNeftekhim-PDH expansion
  ZapSibNeftekhim has started work on the modernisation and expansion of the propane dehydrogenation unit at Tobolsk aimed at increasing propylene capacity up to 561,000 tpa. Due to the expansion in polypropylene production at Tobolsk in recent years, the capacities of the PDH plant do not meet the full demand for raw materials. As a result, ZapSibNeftekhim is required to purchase propylene on the merchant market. The aim is to lower the demand for merchant propylene from around 70-80,000 tpa to 40,000 tpa.
  In 2021 ZapSibNeftekhim purchased 67,100 tons of propylene on the merchant market against 73,900 tons in 2020. The technology for the PDH expansion was signed for UOP C3 Oleflex and concluded prior to the Russian invasion. Problems could emerge from sanctions on the use of this technology and the status of the project.
  Russian propylene sales Jan-Feb 22
  Russian Propylene Domestic Purchases
  Volzhskiy Orgsintez
  Omsk-Kaucuk
  Khimprom Kemerovo
  Plant of Synthetic Alcohol
  Propylene exports from Russia amounted to 26,100 tons in the first two months in 2022 against 12,300 tons in the same period in 2021. Lukoil-NNOS increased export shipments from 3,700 tons to 17,700 tons whilst SIBUR-Kstovo shipped 8,400 tons against only 2,000 tons in January-February 2021. Revenues from propylene exports jumped from $20.1 million in 2020 to $96.3 million in 2021.
  Russian sales of propylene on the domestic merchant market amounted to 74,900 tons in the first two months in 2022 against 58,000 tons in the same period in 2021. The largest propylene supplier to the domestic market was Lukoil-NNOS, shipping 33,300 tons against 25,500 tons in January to February 2021 followed by SIBUR-Kstovo which increased from 24,500 tons to 27,400 tons.
  ZapSibNeftekhim increased merchant propylene purchases from 12,900 tons in January to February 2021 to 27,300 tons in the same period this year. Saratovorgsintez increased purchases of merchant propylene from 27,500 tons to 30,600 tons and SIBUR-Khimprom reduced purchases from 7,800 tons to 5,300 tons. SIBUR-Kstovo sells propylene on the domestic market and consumes propylene at Dzerzhinsk for acrylic acid and esters. In 2021 SIBUR-Neftekhim produced 26,700 tons of butyl acrylate and 10,400 tons of 2-ethylhexyl acrylate. Also, about 4,000 tons of acrylic acid of polymer grade were produced.
  Russian styrene production, sales and exports, Jan-Feb 22
  Russian Styrene Production
  Plastik, Uzlovaya
  Russian Styrene Exports
  Gazprom Salavat
  Russian styrene production declined slightly from 134,700 tons in the first two months in 2021 to 127,900 tons in the same period this year. Nizhnekamskneftekhim reduced production from 53,100 tons to 52,800 tons where most of the styrene is used internally for polystyrene and synthetic rubber output. Gazprom neftekhim Salavat increased styrene production from 34,700 tons to 35,300 whilst SIBUR-Khimprom increased 23,400 tons to 25,000 tons.
  Russian styrene exports amounted to 16,100 tons in the first two months in 2022 against 11,600 tons in the same period in 2021. Gazprom neftekhim Salavat increased exports from 10,500 tons to 13,500 tons whilst SIBUR-Khimprom increased export shipments from 100 tons to 21,600 tons.
  Russian Styrene Domestic Sales
  Styrene was included on the list of EU sanctions, published on 8 April, which means that Russian producers must conclude all export business to Europe prior to 10 July this year and that no contracts could be signed after 9 April. Gazprom neftekhim Salavat planned to ship styrene for export in April, but the product was not delivered in the first ten days in the month. This follows a reduction of shipments to Finland in March against February by 64% to 2,200 tons.
  Domestic merchant sales of styrene rose from 22,200 tons in the first two months in 2021 to 22,800 tons in the same period in 2022. Angarsk Polymer Plant increased sales from 4,100 tons to 6,100 tons whilst Gazprom neftekhim Salavat increased sales from 10,900 tons to 11,200 tons. SIBUR-Khimprom reduced sales from 7,000 tons to 5,000 tons.
  Russian polymers under EU sanctions
  EU sanctions on Russian polymers (8 April 2022)
  Ethylene AO
  Polypropylene (homo)
  VCM-VAM copolymers
  Polyamide 6, 6-6, 6-9, 6-10 and 6-12
  A wide range of polymers have been placed under EU sanctions, imposed on 8 April, although the main grades of polyethylene and polypropylene can still be traded in Europe. Even if sanctions have been avoided so far logistical challenges have already made sales of HDPE and LDPE to European customers more difficult.
  Regarding some of the sanctioned import polymers, around half of volumes of ethylene-alpha-olefins and propylene copolymers are sourced from West Europe, and it may not be straightforward in replacing these volumes with supplies from other regions. Some Western producers have announced the termination of sales of polymers to Russia and Belarus, with the produced volumes redirected to West Europe. Producers are also reducing their purchases of Russian oil.
  Russian polymer trade to China
  Russian Polyolefin Exports to China (unit-kilo tons)
  Ethylene AO Copolymers
  In view of the barriers emerging to polymer trade with Europe, China has become more important for Russian producers this year. The pandemic in China could be a limited factor on consumption this year but the general Russian view is that export volumes to this market should exceed 2021 volumes. Overall Chinese imports from Russia dropped by 8% in March and thus there is no indication at this stage that China will act as an alternative to Western markets.
  ZapSibNeftekhim starts extended shutdown
  The economic effects of Russia's invasion have culminated in SIBUR taking the decision to undertake an extended shutdown at ZapSibNeftekhim's petrochemical complex at Tobolsk. The first stage of comprehensive preventive maintenance, which will last from April to June 2022. During this period, work will be carried out alternately at the production of pyrolysis, polyethylene, polypropylene, the plant of monomers and heat and steam generation. The remaining production will continue to operate in the current mode. Repair work will not affect the supply of ZapSibNeftekhim products to domestic processors, as stocks were created in advance to ensure supplies or accumulated due to the problems in selling Russian product. Scheduled repairs this year will not only increase the reliability and efficiency of technological equipment, as a result of which the burden on the environment will also decrease, but also switch to a four-year overhaul cycle for basic production from its two-year programme.
  EU Sanctions on Russian paraxylene
  EU Sanctions on PX-PET Chain
  Russian Paraxylene Exports (unit-kilo tons)
  Paraxylene was included on the list of EU sanctions, published on 8 April, although other products in the PX-PET chain remain have not been included in the official embargo. For paraxylene It means by EU regulations that Russian producers must conclude all export business to Europe prior to 10 July this year and that no contracts could be signed after 9 April. Russian paraxylene exports have already been affected by the self-sanctioning by the Finnish railways, blocking shipments to the Finnish ports on and off since the invasion of Ukraine. The intention of the Finnish railways is to phase out all business with Russia in the next few months.
  Russian Paraxylene Production 2022
  Export shipments of Russian paraxylene totalled 9,400 tons in the first two months in 2022 against 12,500 in the same period in 2021. Exports declined last year to the lowest level in the past decade, due partly to an increase in PTA production at Polief and partly due to aromatic complex outages. Paraxylene export prices rose last year rising in line with higher feedstock costs, averaging $670.9 per ton against $434.6 in 2020, but now have risen to over $1100 per ton. All of the paraxylene from Russia is exported to Finland and Belarus.
  Russian paraxylene production amounted to 29,634 tons in February this year against 23,261 tons in January and 17,308 tons in December. Ufaneftekhim did not produce paraxylene in December but then produced 4,160 tons in January and 14,986 tons in February. Gazprom Neft and Kirishinefteorgsintez have produced more stable volumes of paraxylene over the three-month period. Sanctions may have some effect on production volumes of paraxylene but probably not affect the PTA chain significantly in the short term.
  In view of the EU sanctions paraxylene shipments for contracts concluded before 9 April need to be completed by 10 July. Russian refineries that produce paraxylene have to find other markets or reduce utilisation rates. China is a huge importer of paraxylene, but logistics is an issue for Russian exporters.
  Ufaneftekhim-paraxylene expansion
  Bashneft is working on the modernisation of the paraxylene unit at Ufa, increasing the quality of production by 0.3% to 99.95% whilst reducing production costs. Modernisation has been carried out by Russian contractors. This will allow an increase in capacity to 260,000 tpa from 165,000 tpa at present. As part of the reconstruction of the complex, the mineral adsorbent was replaced by a synthetic adsorbent of a new generation ADS-37 which raises purity from 99.65% to 99.95%. The Ufaneftekhim aromatics complex has been in operation since 1982, comprising the production of benzene, orthoxylene and paraxylene. Ultrapure paraxylene is already entering the commodity fleet for further shipment to consumers.
  Tatneft-paraxylene and other projects
  Tatneft's construction of the aromatics complex at the Taneko refinery at Nizhnekamsk is well advanced but it is not clear if EU sanctions will affect equipment deliveries if needed to be purchased from Europe. Producing paraxylene for Tatneft would open the possibility of constructing a PTA plant which would supply the Ekopet PET plant at Kaliningrad.
  However, this project is several years away. Even if the aromatics complex is completed Tatneft would not be able to export paraxylene to Europe under current sanctions. Other petrochemical facilities included in the Tatneft Group include Togliattikaucuk which produces synthetic rubber and was acquired from SIBUR in 2019. Ekopet has now been fully integrated into the Tatneft production and management system whereby the aim is to extract maximum effects through the synergy of our petrochemical and oil and gas processing clusters.
  Russian benzene market and production Jan-Feb 2022
  Russian Benzene Consumers
  Azot Kemerovo
  Russian benzene production amounted to 235,100 tons in the first two months in 2022 versus 231,600 tons in the same period in 2021. Nizhnekamskneftekhim reduced benzene production slightly from 50,000 tons to 49,500 tons, whilst Gazprom neftekhim Salavat increased production from 34,500 tons to 35,400 tons.
  Benzene sales on the Russian domestic market to 141,700 tons in the first two months in 2022 against 138,300 tons in the same period in 2021. Angarsk Polymer Plant reduced sales from 9,400 tons to 9,000 tons whilst SIBUR-Kstovo increased sales from 11,500 tons to 12,500 tons. Uralorgsintez in the Perm region increased shipments from 13,900 tons to 14,300 tons.
  EU sanctions on Russian aromatics (8 April 2022)
  Gazprom Neft at Omsk increased sales from 14,300 tons in the first two months last year to 16,600 tons whilst Gazprom neftekhim Salavat increased from 4,300 tons to 8,900 tons. Regarding importers, Karpatneftekhim from Ukraine increased shipments to the Russian market to 4,600 tons in the first two months before stopping production on 24 February whilst shipments from Belarus reduced from 5,200 tons to 4,000 tons.
  Russian benzene exports increased from 4,950 tons in the first two months in 2021 to 13,465 tons in 2021. This was due mainly to the reductions at Kirishinefteorgsintez and the Novolipetsk Metallurgical Combine.
  Amongst the consumers Kuibyshevazot increased benzene purchases from 28,100 tons to 31,900 tons. Other caprolactam producers included Azot at Kemerovo which reduced purchases from 25,700 tons to 23,000 tons and Shchekinoazot which reduced shipments from 13,200 tons to 10,000 tons.
  In the phenol sector Kazanorgsintez reduced purchases from 14,200 tons to 10,600 tons whilst Omsk Kaucuk increased purchases from zero in the first two months last year to 12,400 tons. For styrene production SIBUR-Khimprom reduced purchases from 16,500 tons to 15,700 tons.
  The Russian domestic market for benzene has become complicated due to the artificial rouble rate. Sellers have been advised by the Federal Advisory Service (FAS) not to use European quotations and foreign exchange rates when setting selling prices. Regarding current supply, Uralorgsintez started a maintenance shutdown at the start of April which should last until the end of the month. Kirishinefteorgsintez is also reported to be down in April which should affect overall production volumes.
  Lukoil continues to export benzene to foreign markets, in particular to European countries where benzene trade is not under sanctions. In the first ten days of April, Lukoil shipped about 1,200 tons of benzene from the Stavrolen plant which may amount to 3-5,000 tons for the whole month.
  Russian caprolactam production, Jan-Feb 2022
  Russian Caprolactam Production (unit-kilo tons)
  SDS Azot
  Russian caprolactam production amounted to 371,900 tons in January to February 2022 against 367,000 tons in the same period in 2021. Kuibyshevazot reduced production from 35,200 tons to 33,700 tons whilst SDS Azot at Kemerovo reduced production slightly to 20,300 tons from 21,900 tons. Caprolactam was placed under EU sanctions from the fifth round adopted on 8 April 2022. Exports are not likely to be affected significantly as most of the Russian caprolactam goes to Asia, particularly China and Taiwan.
  Russian Caprolactam Exports (unit-kilo tons)
  Jan-Dec 21
  Russian caprolactam exports dropped from 200,000 tons in 2020 to 159,500 tons in 2021. Although Shchekinoazot increased exports from 45,400 tons to 59,400 tons, SDS Azot at Kemerovo reduced shipments from 101,200 tons to 80,700 tons and Kuibyshevazot reduced shipments from 53,400 tons to 19,300 tons. Overall caprolactam exports dropped from 237,300 tons in 2020 to 196,700 tons in 2021. Main export markets for Russian caprolactam remain China and Taiwan which took 87,600 tons and 58,800 tons in 2021 respectively. Revenues from caprolactam exports increased in 2021 to $327.7 million against $254.5 million in 2020.
  Russian orthoxylene market, Jan-Feb 2022
  Russian Orthoxylene Domestic Sales (unit-kilo tons)
  Russian Toluene Production (unit-kilo tons)
  Slavneft-Yaros
  Both orthoxylene and toluene have been listed under EU sanctions applied from 8 April 2022. Orthoxylene exports from Russia totalled 10,800 tons in the first two months in 2022 against 11,000 tons in the same period in 2021. Last year Kirishinefteorgsintez was the main exporter of orthoxylene, shipping 23,600 tons.
  Orthoxylene domestic sales in Russia amounted to 14,000 tons in the first two months in 2022 against 14,100 tons in the same period in 2021. Gazprom Neft increased domestic shipments from 8,000 tons to 8,900 tons whilst Ufaneftekhim reduced shipments from 600 tons to 4,500 tons. Kirishinefteorgsintez reduced domestic shipments of orthoxylene from 5,500 tons to 600 tons.
  Russian toluene production totalled 53,600 tons in the first two months in 2022 against 52,700 tons in the same period in 2021. Gazprom Neft increased production from 12,900 tons to 13,600 tons whilst Ufaneftekhim increased from 4,300 tons to 13,800 tons.
  Russian phenol market, Jan-Feb 2022
  Russian Phenol Production (unit-kilo tons)
  Omsk Kaucuk, Omsk
  Russian Phenol Exports by Supplier
  Phenol was included on the list of EU sanctions, published on 8 April, which means that Russian producers must conclude all export business to Europe prior to 10 July this year and that no contracts could be signed after 9 April. Russian phenol export revenues increased from $24.6 million in 2020 to $49.0 million in 2021 with Poland serving as the largest destination taking 15,835 tons versus 8,692 tons in the previous year.
  Russian Domestic Market Phenol Sales by Supplier
  Sales on the domestic market are larger which means that producers are not over dependent on export activity. Sales of phenol on the domestic market totalled 20,700 tons in the first two months in 2022 against 23,800 tons in the same period this year with Ufaorgsintez reducing shipments from 10,400 tons to 7,500 tons.
  Russian rubber sanctions
  Russian Synthetic Rubber EU sanctioned from 8 April
  The EU announced an import ban on rubber products and tyres on 8 April, within its fifth package of restrictive measures against Russia. An annex in the EU document further includes a wide range of synthetic rubbers and compound ingredients among materials to be prohibited from "sale, supply, transfer or export" to Russia. Isoprene rubber has been excluded from sanctions to date.
  Europe accounts for an important part of Russian synthetic rubber exports, whilst also providing some key components for the tyre industry which forced some Russian tyre manufacturers to suspend production in the early days of the war. In 2021 Russian synthetic rubber exports to the EU amounted to $588 million, accounting for 30.1% of total shipments. Imports into Russia amounted to $167 million in 2021, accounting for around 73% of total inward shipments.
  Due to its dependence on export activity Russia's synthetic rubber division could be one of the most affected areas in the chemical and polymer industry from international sanctions. Prior to the EU's fifth round of sanctions on synthetic rubber problems around logistics coupled with self-sanctioning by foreign consumers had started to impact on the Russian market.
  Russian rubber producers have faced logistical problems in delivering products to Europe since the outbreak of the war. Now with the new sanctions may be enough to reduce utilisation rates and to even consider unit shutdowns.
  The EU sanctions also ban tyre exports to and imports from Russia. Companies such as Nokian have stated that it will affect the sales of tyres both in Russia and in the EU, specifically in Central Europe. Foreign tyre manufacturers in Russia see extremely limited possibilities for continued operations. In 2021 Russian exports of tyres were valued at $1.35 billion and imports at $2.12 billion, and thus much larger in value than synthetic rubber trade.
  Nizhnekamskneftekhim rubber exports
  Nizhnekamskneftekhim's Rubber Sales to Europe 2021
  Prior to the fifth round of EU sanctions on 8 April Nizhnekamskneftekhim had encountered significant difficulties in the transportation of synthetic rubber to European customers, but now faces the reality of trying to find alternative markets. Isoprene rubber is so far excluded from EU sanctions, but most products produced by Nizhnekamskneftekhim are included. Last year halogenated butyl rubber exports to the EU countries accounted for 48.8% of the company's total foreign shipments. Overall Nizhnekamskneftekhim's revenue from the sale of synthetic rubbers for 2021 increased to $1.059 billion against $745.6 million for 2020 and by volume from 548,200 tons to 614,200 tons. Exports of halogenated butyl rubber increased from 124,700 tons to 137,300 tons with revenues rising from $169.9 million to $216.7 million. Revenues from isoprene rubber and polybutadiene exports rose from $236.4 million to $336.2 million and from $165.9 million to $284.5 million respectively.
  Russian methanol production Jan-Feb 2022
  Russia produced 866,400 tons of methanol in the first two months in 2022 against 736,200 tons in the same period in 2021. Metafrax Chemicals at Gubakha produced 212,000 tons against 204,100 tons in January-February 2021, whilst Gazprom Methanol at Tomsk reduced production from 166,000 tons to 155,200 tons.
  Tomet produced 139,100 tons of methanol in the first two months in 2022 against 80,800 tons in the same period in 2021.
  Russian Methanol Sales (unit-kilo tons)
  Shchekinoazot produced 256,600 tons in the first two months in 2022 against 162,700 tons in January to February 2021, the increase due to the addition of new capacity. Also, in the Tula Oblast Azot at Novomoskovsk reduced production from 49.300 tons to 38,100 tons. Ammoni in Tatarstan reduced methanol production from 25,200 tons in the first two months in 2022 to 18,100 tons in the same period last year.
  Russian methanol not included in EU sanctions
  Russian Methanol & Resin EU sanctioned from 8 April
  Russian methanol avoided inclusion on the long list of chemicals sanctioned under the EU's fifth round adopted on 8 April, although it could be included in future rounds. Since the Russian invasion on 24 February methanol exports to Europe have been restricted by a range of logistical problems, including the blocked rail routes for regular Russian markets such as Romania and Slovakia. Shipments through Finland continue to be transported through the Russian border but lower volumes than expected are being shipped out from Kotka.
  Russian Methanol Export Destinations (unit-kilo tons)
  Although the Finnish rail group VR wants to terminate all business with Russia in the next few months, Russian producers continue to the use this route. Tomet stated in mid-April that it continues to ship methanol through the Oktyabrskaya railway in north west Russia to Finland. In March the VR Group had informed that Tomet was one of half a dozen companies where there would no further trade, but this ruling may have been too hard legally to implement with such short notice.
  Export deliveries of methanol in the first three weeks in April from Russia amounted to 137,573 tons, which was down on numbers hoped for by producers. In March exports achieved around 69% of planned shipment targets and the lower volumes were largely offset by increased domestic merchant sales.
  Russian methanol exports, Jan-Feb 2022
  Russian producer exports of methanol rose in the first two months from last year 325,500 tons to 412,100 tons this year. Tomet exported 59,800 tons of methanol in the first two months up from 24,900 tons in the
  Russian Methanol Exports by Producer
  same period in 2021. Metafrax Chemicals reduced exports from 84,000 tons in January and February 2021 to 83,800 tons this year whilst Gazprom Methanol reduced exports from 79,500 tons to 70,000 tons. The largest Russian exporter in the first two months was Shchekinoazot shipping 188,900 tons versus 117,000 tons in January to February 2021.
  Finland accounted for 139,000 tons of Russian methanol exports in the first two months against 150,100 tons in the same period in 2021. Poland increased deliveries from Russia from 52,400 tons to 68,600 tons whilst exports to the Netherlands rose from 4,600 tons to 42,400 tons. The rise in exports to the Netherlands was due to higher production and transhipment from Tomet in 2022.
  Russian methanol domestic sales, Jan-Feb 2022
  Russian Methanol Domestic Sales (unit-kilo tons)
  Ammoni (Mendeleevsk)
  Russian Methanol Purchases by Consumer
  Togliattikaucuk
  Novokuibyshevsk NPZ
  Uralkhimplast
  Khimsintez
  Merchant sales of methanol on the Russian domestic market amounted to 280,900 tons in the first two months against 307,000 tons in the same period in 2021. Tomet increased sales from 61,700 tons to 74,000 tons whilst Gazprom Methanol reduced sales from 84,400 tons to 68,000 tons.
  Metafrax Chemicals reduced shipments to the domestic market from 73,500 tons in January to February 2021 to 58,700 tons in the same period this year.
  Akron Production & Consumption (unit-kilo tons)
  Incl. in-house consumption
  In April the domestic market continued to provide opportunities for producers but on a more reduced basis than in March. Both synthetic rubber and phenol-formaldehyde resins, which are major consuming applications of methanol in Russia, have been placed under EU sanctions from its fifth round. Nizhnekamskneftekhim is Russia's largest domestic merchant consumer, already facing pressure on production levels due to the difficulties in selling products to Europe.
  Some methanol producers such as Akron at Novgorod are better placed to continue producing at full rates where internal processing accounts for a large part of the usage. From total methanol production of 105,000 tons by Akron last year 91,000 tons was consumed in the production of formalin. Formalin is not listed on EU sanctions, whilst the finished products urea-formaldehyde resins from Akron are shipped largely to Belarus.
  Regarding domestic consumers Nizhnekamskneftekhim recorded a slight fall in purchases from 60,900 tons in the first two months to 59,700 tons whilst Gazprom increased purchases from 33,300 tons to 49,300 tons. Nearly all of the methanol purchases made by Gazprom come from its subsidiary Gazprom Methanol. Togliattikaucuk reduced methanol purchases from 25,400 tons in January to February 2021 to 12,100 tons, the drop being mainly due to lower MTBE production.
  Gazprom Dobycha Noyabrsk provides methanol to the company's remote facilities in Yakutia and Kamchatka. Methanol is used to dry the gas during its commodity preparation at the Chayanda field. Methanol in the amount of 350 tons will be delivered to the Kamchatka fields in May via the Sea of Okhotsk. The transportation route starts from the site of the Tomsk plant of Gazprom Methanol using tank containers. Methanol to the Chayanda field is undertaken either by road using the Vilyuy winter route whilst in the warm season river transportation is used for delivery to Chayanda. The navigation season lasts from 10 May to 10 October during which two-thirds of annual methanol supplies of around 10,000 tons will be supplied to the site.
  In the area of urea-formaldehyde resins Kronospan bought 16,700 tons of methanol against 21,900 tons in January to February 2021 and Metadynea reduced purchases from 21,300 tons to 18,300 tons. Uralkhimplast at Nizhniy Tagil decreased methanol purchases for resin production from 4,400 tons to 4,100 tons.
  Uralkhimplast in 2021 increased its net profit by 29.3%, to 471.1 million roubles, after the company's revenue increased 1.5 times, to 7.23 billion roubles. The production of synthetic resins and plastics in 2021 increased by 14.7% to 82.360 tons, phenol-formaldehyde resins by 11.9% to 67,430 tons, and formalin by 28.6% to 58,420 tons. The net profit of Uralkhimplast in the first quarter of 2022 amounted to 79.4 million roubles, which is 25.5% lower than the same period last year. The fall in net profit occurred at the same time as revenues rose by 40% to 1.9 billion roubles.
  Shchekinoazot-DME plant
  DME Aerosol has completed the construction of the dimethyl ether plant at Shchekinoazot. The 20,000 tpa project was implemented by Thyssen Krupp Uhde Engineering Services GmbH (Germany). DME Aerosol LLC is a joint venture of the Shchekinoazot and the German concern PCC SE. Production will reduce the demand for imports which increased to 8,716 tons in 2021. Exporting product was one of the original projects aims, but this is now complicated due to western sanctions.
  Shchekinoazot-methanol processing and cluster
  Shchekinoazot is the most export-oriented of the methanol producers. The company faces short term challenges in maintaining full production even if it possesses medium and long-term plans to focus more on internal methanol processing. Part of these plans include local companies using methanol for resin production.
  The first stage of the resin development strategy involves the construction of a second unit of concentrated low-methane formalin (KMMF-110) with a capacity of 110,000 tpa and the production of urea and melamine-formaldehyde resins (KFMS-220) with a capacity of 220,000 tpa. Chinese company Wuxi Huali Petroleum and Chemical Engineering was chosen as the licensor (of the KMMF-110 unit and Bakelite for the licensor of the KMFS-220 unit. Both of these units are intended for completion by the end of 2024 but even then, will only consume around 150,000 tpa of methanol.
  Evrokhim-Kingisepp methanol project
  Russian company Springald Group is reported to have started engineering preparation of Evrokhim's methanol project for the Kingisepp district in the Leningrad region. The plot of more than 60 hectares will be handed over to Evrokhim in the summer of 2022. The chances of the plant materialisng on schedule by 2025 seem small as the project depends on acquiring Western technology.
  In 2021 Evrokhim outlined plans for investment into the construction of a methanol plant and terminal in the Kingisepp region of Leningrad. This involved the construction of a methanol pipeline and a port terminal for shipment of products. The terminal is one of the main keys to the project. Alternative solutions for methanol would include being shipped by rail to other Baltic ports such as Sillamae in Estonia. Evrokhim is proceeding as far as it can with the project for now.
  Marubeni exits Volgograd methanol project
  Construction work on the Volgograd methanol project officially started in April despite the current uncertainty over deliveries technology and equipment, particularly from Haldor Topsoe. In March Marubeni withdrew from the Volgograd methanol project where it was participating as a joint investor with the Russian group AEON Corporation. The methanol plant is under construction on the site of the former Khimprom company which closed in 2014.
  The project cost for 1.0 million tpa of methanol was estimated at $800 million and AEON reached agreement with Japanese companies Marubeni Corporation and Mitsubishi as technology partners. US and European companies were afraid to work with Russia based on those sanctions imposed on Russia after it occupied Crimea. At the end of March, the Japanese companies decided to withdraw from the project which now means that the Russian company is seeking another investor, possibly China. The most likely outcome is that the project construction will go as far as possible without foreign partners with hope of change in the overall political environment.
  EU sanctions on Russian organic chemicals (8 April 2022)
  Oxo alcohols were placed under EU sanctions from 8 April. Although direct trade for butanols and 2-EH is limited with Europe, the sanctions imposed by the EU could affect other derivatives. For the most part oxo alcohols are consumed domestically either through internal processing or merchant market sales and so judged in isolation the sanctions do not create problems.
  However, due to the side effects of sanctions and logistical route difficulties the downstream market for oxo alcohols is feeling some impact, particularly in the paint industry where missing raw materials have started to emerge.
  Whilst butanols are produced domestically Russia needs to import other raw materials for paints and varnishes for the car sector. Even foreign coatings manufacturers working inside Russia such as BASF at Pavlovski Posad (near Moscow) produces products mainly from imported raw materials from Germany, which will not be possible after 10 July. Another coatings company Helios Rus at Odintsovo also faces problems from sanctions on imported raw materials.
  Russian N-Butanol Production (unit-kilo tons)
  SIBUR-Khimprom, Perm
  Russian Isobutanol Production (unit-kilo tons)
  Around 50% of water-dispersion coatings for the Russian market are sourced from Germany, Poland, Finland and Korea. Aliphatic polyurethane paints are not produced in Russia at all and are essential for cars. Some Russian manufacturers have accelerated work to expand the range of paints and varnishes, but this is not a quick issue. The problem is also that it will not be possible to accumulate large stocks of paints and varnishes before the introduction of restrictions in July. Suppliers have reserves for two three months and are actively negotiating with manufacturers from other countries. China is the primary alternative for sourcing, but it is not clear about availability and delivery times.
  Russian butanol production Jan-Feb 2022
  Russian normal butanol production fell from 26,500 tons in the first two months in 2021 to 25,100 tons in the same period in 2022. Gazprom neftekhim Salavat was the largest Russian producer, reducing production from 12,400 tons to 11,700 tons in January to February 2021.
  Isobutanol production in Russia increased from 12,800 tons in the first two months last year to 19,300 tons in 2022 during. SIBUR-Khimprom increased production in the first two months from 4,400 tons in 2021 to 8,800 tons. However, SIBUR-Khimprom encountered some production difficulties in March which has affected availability of oxo alcohols for merchant sales. There is little availability from other producers at Salavat, Angarsk and Azot at Nevinnomyssk which uses butanols further processing into solvents. In addition, the enterprise was still idle at the beginning of April: scheduled repairs were carried out.
  Russian producers intended to ship 1,500 tons of normal butanol to the domestic market in April, and 2,400 tons to foreign markets. Sales destinations include China and Turkey which should not face complications from sanctions. In March, Russian companies supplied 4,992 thousand tons of n-butanol to the country's domestic market, which was 6% less than in February whilst at the same time, the export of the product increased by 10% to 1,456 tons. Isobutanol sales on the domestic merchant market are minimal, amounting to 221 tons in March compared to exports of 5,190 tons. The main exporter of isobutanol was SIBUR-Khimprom.
  Russian acetone market Jan-Feb 2022
  Russian Acetone Production (unit-kilo tons)
  Russian acetone production amounted to 31,500 tons in the first two months in 2022 against 27,600 tons in the same period in 2021. Omsk Kaucuk produced 8,300 tons of acetone against 2,9800 tons whilst Kazanorgsintez increased production from 8,800 tons to 9,000 tons.
  Acetone was included on the list of EU sanctions, published on 8 April, which means that Russian producers must conclude all export business to Europe prior to 10 July this year and that no contracts could be signed after 9 April. The Netherlands is the largest destination for Russian acetone exports, with Latvia and Lithuania also important.
  Acetone exports from Russia totalled 65,300 tons in 2021 against 47,700 tons in 2020. Revenues from Russian acetone exports rose from $22.5 million in 2020 to $45.2 million in 2021 after prices rose in accordance with higher feedstock costs. The largest market for Russian acetone exports was the Netherlands taking 29,500 tons against 13,800 tons in 2020. Belarus imported 10,900 tons of acetone from Russia in 2021 versus 9,700 tons in 2020.
  SIBUR completes construction of maleic anhydride plant
  ZapSibNeftekhim has completed construction and installation work on the maleic anhydride plant at Tobolsk. The capacity of the plant has been designed to produce 45,000 tpa based on Conser technology from Italy. Start-up is scheduled for the second quarter in 2022. Most of the production is intended for export activity. The question that may be difficult to answer is how easy it will be to sell maleic anhydride to other countries.
  Russian polyurethane sector falls partly under EU sanctions
  EU sanctions on Russian PU chain (8 April 2022)
  The Russian polyurethane sector is encountering difficulties with raw material supplies from sanctions and logistical issues. TDI and MDI were excluded from the EU sanctions introduced against Russia on 8 April, but holdups in the logistical process has slowed down delivery times. One of the major polyurethane producers the Dow Izolan plant at Vladimir is believed to still be operating despite reports that it had been closed. However, the plant is reported to be encountering problems with deliveries of raw materials. Further investment though seems unlikely as Dow Chemical which holds a 49% stake in the jv is minimising its involvement in the Russian market.
  Due to increasing Russian isolation Tatarstan has renewed its proposed suggestions for constructing isocyanate facilities, but probably unrealistic taking all factors into account. However, it is valid to state that the shortage of propylene oxide along with the lack of production capacity of isocyanates (MDI and TDI) places restrictions on the growth of the Russian industry of polyurethane foams and related industries.
  Detergent and household chemical raw material challenges
  Russian LABS Imports (unit-kilo tons)
  Russian LABS Imports ($ mil)
  The production of liquid detergents depends to a large extent on imported raw materials, some of which were placed under EU sanctions on 8 April. Even before sanctions were introduced deliveries of raw materials were being affected by transport problems. For domestic producers such as Nefis Cosmetics in Kazan the dependency on imported raw materials could restrict production volumes and thus the company is looking towards domestic alternatives.
  Nizhnekamskneftekhim is already considering an increase in the production of alpha-olefins which would help Nefis Cosmetics in the production of liquid detergents. An expansion would be dependent though on Linde technology which is not available under the new sanctions' regime. Current alpha olefins production at Nizhnekamsk does not meet the specification standard for detergent manufacture. Moreover, for alpha olefins production Nizhnekamskneftekhim may not have enough ethylene whilst the technology belongs to Linde which is restricted by sanctions and suspended all new business in Russia.
  Russia does not produce higher fatty alcohols and needs to import in addition to amines. It is not clear if amines and fatty alcohols come under EU sanctions but alkylbenzenes are listed. There is domestic production of linear alkylbenzene (LAB/LABS) at Kirishi even if volumes are insufficient to meet domestic demand. Taneko could potentially produce LAB/ABSK after its aromatics complex is completed at Nizhnekamsk, but questions remain over technology.
  Nefis Cosmetics, with its AOS and Sorti brands, traditionally competes with Procter & Gamble, which produces Fairy. As a result, the Kazan company ranks second in the Russian market in relation to dishwashing detergents, producing 110,400 tons in 2020.
  Production of reagents for cellulose bleaching
  Russian Sodium Chlorate Imports (unit-kilo tons)
  Russian Sodium Chlorate Imports ($ mil)
  After the initial blocking of sales from Finnish company Kemira, since sanctioned by the EU, Russia has been forced to consider the production of its own chemical reagents for the paper industry. Since Kemira has stopped selling reagents the price of office paper for a wide range of purposes has risen several times creating problems for schools, businesses, etc. Some suggestions are being considered in particular from Arkhangelsk, where pulp and paper production has existed for a long time. However, paper for the consumer industry is not produced with focus on containerboard, hardwood and soft cellulose.
  Most pulp and paper enterprises in Russia, as well as in West Europe and the US, use the generally accepted technology for bleaching cellulose using chlorine dioxide according to the Matheson system using liquefied sulphur dioxide anhydride. Instead of sulphur dioxide, hydrochloric acid has been proposed. The first technical tests were carried out at the plant itself and may work but turning it into something that could be used widespread may be difficult.
  Khimprom Novocheboksarsk could increase prod#uction of hydrogen peroxide
  Russian Hydrogen Peroxide Imports
  Some Russian chemical producers are benefiting from the withdrawal of European chemical companies. Khimprom at Novocheboksarsk states that it has experienced around a 50% increase in demand for hydrogen peroxide since the end of February.
  Hydrogen peroxide was included in the fifth round of EU sanctions adopted on 8 April, and thus Khimprom will continue to benefit the embargo. For the purchase of the main raw materials, Khimprom was forced to reorient itself from Europe to China. Another side effect of Russia's isolation for Khimprom has been an increase in the demand for chlorine and the production at Novocheboksarsk has been increased by two-fold since the start of the war. Other products where demand has been increasing include chloromethanes and sodium percarbonate. There is also good demand for organosilicon, flotation reagents, and additives to mineral oils.
  At the same time as demand for its own products has been rising, Khimprom is facing difficulties in receiving supplies of imported raw materials. Many commercial chains within the country are disintegrating, foreign ties are broken, as a result of which there is a shortage and rise in price of raw materials, spare parts and equipment.
  Logistical problems affect both import and export shipments. Some products which Khimprom exports such as calcium hypochlorite can easily be reoriented to the Russian market, but for other products such as acetonanile and diphenyl guanidine it is not straightforward in finding domestic consumers or other export markets. The company is thus being forced to find new niches within the country and alternative ways of supplying foreign raw materials and switching to other modes of transport.
  Khimprom belongs to the Orgsintez group which is building a new plant at Novocheboksarsk for the production of anthraquinone hydrogen peroxide, with a capacity of 50,000 tpa. Work on the project is estimated at 68% of the construction schedule with the aim of launching the new plant at the end of 2023. Currently, Khimprom produces hydrogen peroxide using isopropyl technology.
  Ukrainian chemical sector Q1 2022
  Ukrainian-Russian Chemical & Polymer Trade ($ mil)
  Chemicals exports from Ukraine
  Chemicals imports into Ukraine
  Plastics exports from Ukraine
  Plastics imports into Ukraine
  Rubber exports from Ukraine
  Rubber imports into Ukraine
  Whilst Ukraine not a significant producer of organic chemicals and polymers, it does possess a number of companies operating in other sectors of the chemical industry including pharmaceuticals where there is a high degree of specialisation. Sales of chemical products fell on average by 30% in January-March 2022, compared to the same period in 2021. In January and February, exports of chemical products amounted to almost $600 million, but slumped to $160 million in March, following Russia's invasion on 24 February.
  In terms of chemical and polymer trade with Russia business has been in decline since around 2013. Whilst most values were higher than in 2021 than in 2020 physical volumes continued to fall. If after the war Ukraine survives as a country previous business links may be hard to revive.
  Even those chemical facilities located away from active hostilities have had to suspend production due to disruptions in supply chains, lack of funds to buy raw materials and a reduced workforce as workers have moved to safer regions and abroad. The industry is also coping with global factors such as rising prices for hydrocarbons. The vast majority of manufacturers of chemical products are not functioning. Production lines are frozen, and products have been sold or exported to safe regions. The main task of the national chemical industry is to survive under such critical conditions.
  Ukrainian polyurethane raw material problems
  Some Ukrainian manufacturers of polyurethane products are still trying to operate despite the war but are almost inevitably experiencing a shortage of raw materials. Western Ukrainian manufacturers of flexible products made of polyurethane (for example, such as furniture foam rubber) lack raw materials from European plants that refuse to supply them and extend contracts. Foam Group Holdings at its plant in Kvasilov, near Rivne, has stopped production because the plant ran out of raw materials. Ukrainian manufacturers have offered to arrange freight forwarders with a Ukrainian distributor in Europe and the US, but this was not accepted.
  Polyols and TDI have been supplied in parts to Ukraine, but manufacturers are running on a day-to-day basis. In an effort to alleviate the situation for refiners, the Ukrainian government has included polyols in a list of strategic raw materials that can be bought for the country's limited reserves of dollars and euros.
  SOCAR Methanol 2022
  Azerbaijan is looking to take advantage of Russia's logistical challenges in exporting methanol by meeting some of the demand. Some European consumers have already been in contact. SOCAR Methanol produced 96,000 tons of methanol in January-February 2022. At the start of March, the company's warehouse held 31,000 tons of methanol. From its production in 2021 SOCAR Methanol exported 74,460 tons of methanol worth $23.827 million.
  Kazakh polypropylene plant completion
  LAB/LABS project Uzbekistan
  For the GTL plant at Shurtan Uzbekneftegaz has signed a preliminary deal with Honeywell UOP on a project to produce linear alkylbenzenes. Under the memorandum of understanding (MoU), the plant will produce up 100,000 tpa of linear alkylbenzenes (LABs) using a by-product of kerosene production. Uzbekistan launched its first gas-to-liquids (GTL) plant in a $3.6 billion project to extract value from domestically produced natural gas.
  KazMunayGaz has completed the main construction at the gas chemical complex of Kazakhstan Petrochemical Industries (KPI) in the Atyrau region. After commissioning, the 500,000 tpa plant will produce more than 65 different grades of polypropylene. The raw material propane is delivered from the Tengiz field to the site of the complex by rail in tank cars. Tengizchevroil will supply 550,000 tpa by rail. At the plant, the raw materials will be processed at the propane dehydration unit to obtain propylene, and then at the polymerisation unit will receive granular polypropylene.
  Uzbekistan-reagent investments
  Shurtan Gas Chemical Complex production 2021
  Shurtan Gas Chemical Complex processed 4.174 billion cubic metres of natural gas in 2021 and 135,200 tons of polyethylene. The plant generated exports of $5.599 million in 2021, up 19.6% on pre year forecasts.
  Uzbekneftegaz plans to organise the production of new types of products such as diethyl enamine and methylethyleneamine together with the Russian company Sintez OKA. Chemical reagents developed by the company Sintez OKA are already used in oil and gas production departments and processing enterprises of Uzbekneftegaz. An agreement was reached to accelerate the work on technical testing of products developed by Sintez OKA for the project of gas purification from mercaptan compounds at the Mubarek Gas Processing Plant.
  Uzbek domestic polyolefin sales increase
  Two polyolefin plants belonging to Uzbekneftegaz, the Ustyurt Gas Chemical Complex and the Shurtan Gas Chemical Complex, jointly supplied 23% more polyethylene and polypropylene to the domestic market in the first two months this year. Due to increased domestic demand the export of polyethylene produced by the Shurtan Gas Chemical Complex has been stopped in addition to polypropylene produced by Uz-Kor Gas Chemical.
  Uz-Kor Gas Chemical was put into operation in 2016. It has a production capacity for the production of ethylene of 400,000 tpa, 387,000 tpa of HDPE, 83,000 tpa of propylene and polypropylene tpa. The capacity of the Shurtan Gas Chemical Complex is 125,000 tpa of polyethylene.