Sanctions hit Sibur petrochem plans with Indian Oil

livemint.com:

New Delhi: Russia’s largest integrated petrochemicals company PJSC Sibur Holding’s plan to build a large petrochemical plant with state-run Indian Oil Corp. Ltd (IOC) at Paradip has hit a roadblock due to the sanctions amid ongoing Russia-Ukraine war, said two people aware of the development. The two partners were slated to sign an agreement for the facility but Sibur, also Russia’s largest liquefied petroleum gas producer, has kept its plan on hold following the sanctions on Moscow amid the Ukraine war.

This led IOC to go ahead with the project on its own. Sibur’s participation in the petrochemicals venture was billed to be part of a multi-pronged approach between India and Russia involving a joint collaboration in petrochemicals, energy sourcing and supplies, as well as upstream investments in both the countries. The last large investment from Russia in the Indian energy space was the $12.9 billion acquisition of Essar Oil Ltd in 2017 by a consortium led by Rosneft that included the sale of the 20 million-tonnes-per-year Vadinar refinery and the Vadinar port.

Mint reported on Sibur’s proposed investment on 5 August 2021. The investment was explored given IOC’s focus on expanding its petrochemical business amid growing demand for petrochemicals in India and worldwide. As of 2022, India was the sixth largest petrochemicals market in the world with a market size of $190 billion, and is expected to reach $1 trillion in 2040.

“While we are facing problems with our assets in Russia in the wake of sanctions, even proposed Russian investments in India such as that from Sibur are stuck. They were looking to partner with Indian Oil Corp. Nothing is happening on that front.