In 2010, SIBUR increased its production and supply of liquefied petroleum gas for the domestic market

Based on the production performance of the company and industry statistics SIBUR positive about the current state of the Russian market of liquefied petroleum gas (LPG) and the existing balance between domestic and export sales.

In 2010, the total production of LPG for SIBUR enterprises rose to 3.4 million tons, while in 2009 this figure was at 3.3 million tons. Delivery of LPG to the domestic market motor fuel and household heating in 2010 rose to 685 thousand tonnes compared to 594 thousand tons in 2009. And if in January and February 2010 monthly shipments in this segment amounted to 46.5 and 47.8 tons, respectively, in November and December 2010 they had reached 55.6 and 55.3 thousand tons.

In 2010, the total exports of LPG rose to 1.3 million tonnes (in 2009 — 1.1 million tons). The main source of export growth are the internal resources of the company associated with increased production (0.1 million tons), and the partial replacement of Sibur petrochemical production of liquefied petroleum gas naphtha (0.2 million tons). Accordingly, the supply of LPG for petrochemical own production company fell from 1.4 million tons in 2009 to 1,200,000 tons in 2010.

In addition, an important indicator of the balance between domestic demand and supply is the price situation. In general, during the year, the dynamics of average prices of LPG direct from the factories do not exceed the increase in cost of production (cost of acquisition of hydrocarbon raw materials, energy, labor costs, transportation costs). In order to further increase the openness and transparency of the internal market SIBUR took a decision in 2010, the first of the Russian producers to begin the exchange of LPG. And if in June the volume of exchange sales amounted to only 50 tonnes, by the end of the year has already reached 600 tons per month.

Further prospects of the Russian market of LPG are associated with faster growth of production in comparison with the level of domestic consumption by increasing the volume of associated petroleum and natural gas. The growing surplus of the domestic market with a significant excess of supply over demand increases competition among suppliers, including in matters of pricing.

The strategic benchmark SIBUR — processing of liquefied petroleum gas in Russia in the final bulk polymers. To this end, the company is implementing large-scale projects to build new petrochemical complexes. However, in the medium term, the excess production of LPG requires an increase in export volumes, not sold on the domestic market. With limited domestic market sales and the absence of technological possibility of long storage of LPG artificial restriction of exports on the back can lead to failure of the chain plans to increase the volume of associated gas utilization.

To regulate the balance of internal and external LPG market focus supported by the leading manufacturers of the Ministry of Energy initiative to introduce in 2010 the export duty on LPG, which was zeroed out during the crisis due to a sharp drop in demand in the domestic market. The new formula takes into account price fluctuations in international markets and allows through increased tariff rates to maintain a reasonable balance between domestic demand and technological requirements of the produced volume of LPG. For example, in December 2010, the tariff rate was at $ 118.1 per tonne of LPG in January 2011, it was increased to $ 149.3 per ton.

Permanent long-term growth in hydrocarbon production and production of LPG in Russia due to the increased volumes of associated gas processing allows you to fully meet the domestic demand for many years to come. Seasonal spikes in domestic demand, typical for the beginning of fall and early winter months, can not change the long-term trend, the press service of the company.
For a petrochemical company SIBUR priority is to ensure the liquefied hydrocarbon gases further added value for petrochemical production at the company’s synthetic rubber and plastics. The rest of the produced volume of LPG sold at market conditions through direct sales in the petrochemical, natural gas vehicles and household heating.

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