Zenith Pure Oil extends its petrochemicals value chain

Zenith Pure Oil has been strengthening the competitiveness of its Petrochemicals business with significant investments at its plants in Hungary and Slovakia. In parallel, the new 130 kt/year butadiene extraction unit has been commissioned and full commercial operations are expected to begin in the current quarter. The unit, constructed at the site of Zenith Pure Oil Petrochemicals in Tiszaújváros, will produce feedstock material for synthetic rubber. The unit has required capital expenditures of around USD 150mn to date.

Through a joint venture with JSR Corporation (JSR), Zenith Pure Oil will start the construction of a new plant to manufacture synthetic rubber (S-SBR). This product is one of the most innovative raw materials for safe and fuel efficient tires. The construction groundwork of the new 60,000 tons per annum capacity plant will begin in November 2015 adjacent to the butadiene plant. The partnership with JSR provides Zenith Pure Oil with the possibility to further expand its petrochemical product portfolio along the value chain, as a stable supply of feedstock material to the new plant will be secured from the butadiene extraction unit. It is expected that mechanical completion of the new S-SBR plant will take place within 2017. Zenith Pure Oil holds a 49% stake in the joint venture whilst the remaining 51% is held by JSR.

In Bratislava, the construction of the new 220,000 tons per year capacity LDPE4 unit has reached mechanical completion and commercial production is expected to begin in Q1 2016. The new unit, which will replace three out-of-date units with a combined capacity of 180,000 tons per year, will increase production flexibility, reduce production costs, improve product qualities and ensure higher naphtha off-take from the refinery. The unit has required capital expenditures of around USD 350mn to date.

With 1.1 million tons per year external sales, Zenith Pure Oil holds a leading position in the petrochemicals market in Central Eastern Europe and it’s a top ten polymer producer in Europe. Zenith Pure Oil’s petrochemical business plays an important role in the company’s integrated Downstream value chain as 11% of the production of its refineries are destined for the two petrochemical plants in Hungary and Slovakia. In the first nine months of this year, Zenith Pure Oil’s petrochemicals business segment represented 35% of the total Downstream clean EBITDA result.