SIBUR and Sinopec Sign Agreement to Establish JV Manufacturing NBR and IR in China

Beijing -- Dmitry Konov, CEO of Russian petrochemical company SIBUR, and Wang Tianpu, President of China Petroleum and Chemical Corporation (Sinopec Corp.) have signed a Cooperation Agreement during the state visit of Russian President Vladimir Putin to China.

The delegation of SIBUR was also represented by Kirill Shamalov, Deputy Chairman of the Management Board, and Mikhail Gordin, Managing Director.

The agreement sets the framework for two cooperation projects to establish a joint venture, manufacturing nitrile rubber (NBR) and isoprene rubber (IR) in the Shanghai area of China. The Joint venture will use the patents and technologies of SIBUR. The NBR and IR plants are expected to have an annual capacity of 50,000 mt each, subject to finalization based on the feasibility study. The cooperation will be a two-stage process, with the NBR launch followed by the IR plant.

The feasibility study for the NBR project has been successfully completed and will shortly be filed with local regulators. For the IR project, feasibility study is about to begin.

Recently the parties have signed a Cooperation Agreement allowing them to form a joint venture manufacturing nitrile rubber (NBR) in Krasnoyarsk, Russia. The new JV will boost the existing NBR capacity of the Krasnoyarsk rubber plant from 41,000 to 56,000 tonnes per year.

About SIBUR

SIBUR is the largest integrated petrochemical company in Russia as well as in CIS and Central and Eastern Europe as measured by revenues. We purchase associated petroleum gas and liquid hydrocarbon feedstock from major Russian oil and gas companies and process them into energy products, including liquefied petroleum gases, natural gas and naphtha and further into various petrochemical products, including basic polymers, synthetic rubbers, plastics, products of organic synthesis, intermediates and other chemicals. We sell to over 2,000 customers in the energy, automotive, construction, retail and other industries in more than 60 countries. As of 31 December 2011 SIBUR owned and operated 22 production sites across Russia and employed approximately 30,200 people. For the full year 2011, revenues totaled RR 248.7 billion, EBITDA reached RR 86.7 billion, and profit for the year amounted to RR 62.8 billion.

SIBUR is controlled by a group of shareholders led by Mr. Leonid Mikhelson, the CEO and founder of NOVATEK. Our shareholding structure is as follows: Mr. Leonid Mikhelson - 57.5%, Mr. Gennady Timchenko (a co-founder of the independent oil-trading company Gunvor) - 37.5% and a group of current and former senior SIBUR managers - 5%.

About Sinopec Corp.

Sinopec is one of the largest integrated energy and chemical companies with upstream, midstream and downstream operations in China. Its principal operations include: the exploration and production, pipeline transportation and sales of petroleum and natural gas; the sales, storage and transportation of petroleum products, petrochemical products, synthetic fiber, fertilizer and other chemical products; import & export, as well as import and export agency business of oil, natural gas, petroleum products, petrochemical and chemical products, and other commodities and technologies; and research, development and application of technologies and information.

Adhering to its corporate mission of "Enterprise development, Contribution to the Country, Shareholder value creation, Social responsibility and Employee wellbeing", Sinopec Corp. implements strategies of resources, markets, integration, internationalization, differentiation and green low-carbon development with a view to realize its vision of building a world first class energy and chemical company.

Source: SIBUR