ZAPSIBNEFTEKHIM Contents Market background of the project 4 Feedstock for the project 6 Production chain 8 Import substitution and higher export potential 10 Key uses 11 A major petrochemical construction site globally 12 Project impact on related industries 14 Unique cutting-edge equipment 16 Exceptional logistics of oversize equipment 18 Advanced construction technology 20 New jobs 22 Environment-friendly processes 24 Similar production sites in Europe 26 SIBUR’s nature path 28 Sky deck 30 ZAPSIBNEFTEKHIM Market background of the project SIBUR’S STRATEGY: MONETISING UNIQUE ACCESS TO FEEDSTOCK AND GROWTH IN DEMAND FOR PETROCHEMICALS ZAPSIBNEFTEKHIM WILL INCREASE THE INDEX OF GLOBAL GROWTH IN BASIC MATERIALS PRODUCTION* PETROCHEMICAL SEGMENT’S SHARE IN SIBUR’S BUSINESS PORTFOLIO 13 12 2016 BEYOND 2020 11 10 41% 9 FEEDSTOCK AND ENERGY 8 60% 7 FEEDSTOCK AND 6 ENERGY 5 4 3 59% 2 40% PETROCHEMICALS PETRO- 1 CHEMICALS 0 ZAPSIBNEFTEKHIM Times Year 1970 1995 2015 HYDROCARBON KEY USES RESOURCES KEY USES FEEDSTOCK CEMENT ROUND IRON GLASS CARDBOARD PLASTICS (CONCRETE) TIMBER AND PAPER ALIMINIUM FEEDSTOCK AND ENERGY PETROCHEMICALS 4 *USGS, FAO, BP, Rubber, The New Plastic Economy 5 ZAPSIBNEFTEKHIM Feedstock for the project 2016 Purovsk 2003 Purovsky GCPP APG PROCESSING Gubkinsky GPP 8 bcm › 25 bcm Muravlenkovsky GPP Noyabrsk C3 RECOVERY RATE Noyabrsk loading rack Nyagan Vyngapurovsky % ›95 % GPP 64 Nyagangazpererabotka Surgutneftegas Surgut Surgut CSP MAX PIPELINE THROUGHPUT Nizhnevartovsk Khanty-Mansiysk Belozerny GPP Nizhnevartovsky Yuzhno-Priobsky GPP GPP Yuzhno-Balyksky 4.8 mt › 8 mt Pyt-Yakh GPP Yuzhno-Balyksk MPS NGL FRACTIONATION IN TOBOLSK Tobolsk 2.3 mt › 8 mt 10 KM Tobolsk site. ZapSibNeftekhim 6 7 ZAPSIBNEFTEKHIM Production chain OPERATIONAL FACILITIES Deethaniser DEETHANISED NGL SIBUR Tobolsk fractionation ETHANE-RICH NGL units ETHANE-RICH NGL PROPANE ZAPSIBNEFTEKHIM FACILITIES N-BUTANE ETHANE- PROPANE FRACTION Polypropylene PROPYLEN unit E ETHYLENE Polyethylene Steam cracker units 94 13 137 1,500 500 ktpa ktpa ktpa ktpa ktpa OF BUTADIENE OF MTBE OF HYDROGENATED PYGAS OF POLYETHYLENE OF POLYPROPYLENE 8 9 ZAPSIBNEFTEKHIM Import substitution Key uses and higher export potential* Growth in Growth in domestic supplies Х2 exports Х14 CIS POLYPROPYLENE POLYETHYLENE CONSTRUCTION MATERIALS MEDICAL PRODUCTS CONSUMPTION, kt CONSUMPTION, kt 2,224,138 km billion PRODUCTION, kt PRODUCTION, kt 600 China of water supply pipes vials 2,922.1 2,277.1 Europe 1,863.4 AUTOMOTIVE PARTS PACKAGING 1,517.7 Turkey 71,428,571 16,129,032 km 1,212.8 of food wrap or stretch film 1,236 car bumpers 844.7 945.1 945.6 612.4 745.5 Latin America 603.5 Africa CABLES TEXTILE INDUSTRY ZAPSIBNEFTEKHIM ZAPSIBNEFTEKHIM Year COMPLETION Year COMPLETION 2009 2016 2009 2016 2 2019 2019 35,917,820 km 151 km 10 of fiber optics insulation of carpeting 11 *Market Report, public sources ZAPSIBNEFTEKHIM A major petrochemical construction site globally MAJOR POLYMER PRODUCTION PROJECTS* No. Country Company Location Greenfield/brownfield Capacity, kt 1 Russia SIBUR Amur GCC** Greenfield Ethylene – over 1,500; PE – over 1,500 2 USA SASOL Lake Charles Greenfield Ethylene – 1,550 12,100 km 3 Malaysia Petronas Pengerang Greenfield Propylene – 1,750; ethylene – 1,000 of cable: approximate distance from 4 Russia SIBUR ZapSibNeftekhim Greenfield Ethylene – 1,500; PE – 1,500; PP – 500 Moscow to Magadan 5 India Reliance Jamnagar Greenfield Ethylene – 1,500; PE – 950 Industri es 141,800 t 113,100 piles of metal structures: enough to build x14 Enough to lay foundation for forty fourteen Eiffel Towers tower blocks 418,400 m3 of concrete: enough to fill three stadiums x3 x40 12 * Source: IHS 13 ** Decision to proceed to the Execution stage is not expected until year-end 2018. ZAPSIBNEFTEKHIM Project impact on related Managing the construction of industries off-site facilities CONTRACTS WITH RUSSIAN COMPANIES WORTH OVER RUB 200 BN Producers and contractors NEARLY FROM RUSSIAN REGIONS 1,000 35 process equipment units 46 million man-hours of builders and OVER 140,000 t engineers of metal structures OVER mcm 0.4 NEARLY 20,000 t of concrete of pipe OVER 110,000 PILES OVER 200 km of plastic pipe 18,000 PERSONS engaged at the peak of construction OVER 12,000 km 14 of cable 15 ZAPSIBNEFTEKHIM Unique cutting-edge equipment 106 m −140°C 85 MW 850°C 50 bar TEMPERATURE PRESSURE INSIDE THE PROPANE FRACTIONATION INSIDE THE COLD CAPACITY OF PYGAS TEMPERATURE INSIDE UNIT TRAIN COMPRESSOR, ONE PYROLYSIS FURNACES ETHYLENE AND Two times longer and eight times Average temperature on the 1.5 times hotter than on PROPYLENE heavier than Boeing 787 lunar surface OF THE LARGEST IN the Venusian surface THE WORLD POLYMERISATION UNIT Water pressure at a depth of 500 m Power of 1,000 cars 917 t 16 17 ZAPSIBNEFTEKHIM Equipment suppliers from more than Exceptional logistics of oversize SABETTA 40 Russian regions equipment Tyumen Zelenograd Saratov Yelabuga Ufa Nizhny Novgorod Izhevsk Nizhnekamsk Chelyabins Veliky Novgorod Yaroslavl Kurgan k Tambov Omsk Novomoskovsk Salavat Barnaul Penza Dzerzhinsk Sterlitamak TOBOLSK Belgorod Kazan Magnitogorsk Budyonnovsk Rostov-on-Don Votkinsk Angarsk SAINT PETERSBURG Vologda Voronezh Ryazan Cheboksary Orenburg Kemerovo Samara Kumertau Novy 3,300 km Kostroma Togliatti Naberezhnye Urengoy Shadrinsk Chelny Kostroma 7,000 km GERMANY 6,500 km CZECH REPUBLIC ZABAIKALSK NOVOROSSIYSK FRANCE 5,200 km VLADIVOSTOK ITALY NAKHODKA VOSTOCHNY VLADIVOSTOK, BUSAN KOBE NAKHODKA SHANGHAI BUSAN Suez Canal GUANGZHOU KOBE JEBEL ALI 8,000 km SHANGHAI MUMBAI GUANGZHOU 18 19 ZAPSIBNEFTEKHIM Advanced construction technology INNOVATIVE PE PIPE WELDING TECHNOLOGY 5–10 min Minimum equipment required (one excavator and one pipe layer) TO CUT OFF PILES 1.5 M 28 km ABOVE THE GROUND – A LONG WATER PIPELINE UNIQUE COOLING TOWER A unique environment-friendly technology of trenchless pipe laying using directional One of the world’s largest nearly fully drilling. A horizontal well is drilled below the frozen river bottom to lay pipes using a underground cooling towers spanning 9,000 sq m dedicated belling bucket 20 21 ZAPSIBNEFTEKHIM New jobs Employment geography Construction Post-commissioning Petrochemicals Oil refining Gas processing Universities and colleges 18,000 2,000 1,700 Novy Urengoy PERSONS ENGAGED AT THE PEAK PERSONS ENGAGED Backup programme PERSONS ENGAGED IN CORE OF CONSTRUCTION IN AUXILIARY PRODUCTION SERVICES Surgut Yaroslavl Langepas Tobolsk Perm Nizhnevartovsk Nizhny Novgorod Kazan Tyumen Yekaterinburg Nizhnekamsk Tomsk Omsk Ufa Sterlitamak Voronezh Salavat Angarsk Orenburg Budyonnovsk Backup programme Programme participants include external candidates to be trained as backups by SIBUR’s mentors at a number of production sites. After completing the programme, backup employees are hired by ZapSibNeftekhim or 2009 2015 2020 replace their mentors transferred to ZapSibNeftekhim. 22 23 ZAPSIBNEFTEKHIM Environment-friendly processes REGULAR INITIATIVES UNDER THE ENVIRONMENTAL MONITORING AIR POLLUTION INDEX PROGRAMME INCLUDE: (2016 REPORTS BY ROSHYDROMET) 99.9% efficiency of state-of-the- art gas treatment systems 14 THE BULK OF WASTE IS TO BE RECYCLED Air monitoring 9.4 mcm20 Post-launch index Fauna monitoring to remain unchanged MOSCOW KAZAN level Low TOBOLSK 2020 CLOSED-LOOP WATER Extremely high level high Extremely High level High 2 Vegetation monitoring SYSTEM 24 25 ZAPSIBNEFTEKHIM Similar production sites in Europe POLYPROPYLENE UNIT Technology Lyondellbasell, Netherlands POLYETHYLENE UNIT Płock, Cologne, Poland Technology Germany Ineos, UK Litvínov, Czech Republic STEAM CRACKER Technology Linde, Germany 26 27 ZAPSIBNEFTEKHIM SIBUR’s Nature Path A joint project of SIBUR and RAS's Integrated Local fauna has fully Research Station in Tobolsk adapted to the industrial to study and monitor biodiversity in the environment vicinity of the site 3 The routes have monitoring sites to analyse air, water and forest routes soil samples, information boards, and other required 500 m infrastructure away The nature path from ZapSibNeftekhim’s features bioindicator construction site plants Relict pine tree 1,500 m away from the Tobolsk production site The project received an award of the Environmental Culture.Peace and Harmony international project and the jury's accolade as Russia’s only initiative of the kind rolled out in the immediate vicinity of an industrial site, Tree Spotted orchid as well as the Vernadsky National 28 lungwort 29 Environmental Award. ZAPSIBNEFTEKHIM Sky deck Formula of the future SKY DECK IS THE HIGHEST Maximum utilisation of energy efficient polymer POINT NEAR THE construction materials makes the facility unique CONSTRUCTION SITE CORIAN POLYURETHANE FLOOR COATING EXPANDABLE POLYSTYRENE A solid surface material High-tech tough flexible High-quality thermal insulation made of acrylic resin and seamless self-levelling floor material with uniform structure aluminium trihydrate coating made of heterochain polymers (two components in the main chain) WOOD PLASTIC COMPOSITE REINFORCEMENT COMPOSITE Hybrid of wood and Non-metallic bars made of glass, plastics that rivals the basalt, carbon or aramid fibres strength of metals bonded with a thermosetting polymer binder 58 mm 6m UV IGU WITH REFLECTIVE THICK WINDOW THE GLASS INSULATING LARGEST GLASS UNITS GLASS (IGU) PANES PRODUCED IN RUSSIA 30 31 SIBUR Holding, 2017 .