Joint Russia-Kazakhstan, China Contractor-Built Synthetic Rubber Plant To Target Asian EV Tires Demand

A joint project of Russia’s Tatneft and Kazakhstan’s Samruk-Kazyna wealth fund to build a butadiene plant is to begin its investment phase in July 2025, with China Tianchen Engineering Corporation as its contractor, the Kazakhstan government’s press service has said.

Butadiene is a colorless gas and a crucial industrial chemical primarily used to produce synthetic rubber. The majority of butadiene is used in synthetic rubber, particularly for tires, and also contributes to the production of resins and various plastics.

Kazakh Prime Minister Olzhas Bektenov and Tatneft CEO Nail Maganov stated that “We are actively working with the contractor, China Tianchen Engineering Corporation. The project aims to produce 60,000 tonnes of divinyl styrene synthetic rubber (DSSR) annually for use in the rubber and tire industry, 40,000 tonnes of styrene-butadiene-styrene rubber (SBS) for road surfaces and plastics and 40,000 tonnes of methyl tert-butyl ether (MTBE) as high-octane gasoline. The investment phase is expected to begin on July 1 this year.”

The parties also discussed geological exploration work at the Karaton Podsolevoy block, conducted together with the KazMunayGas national company, as well as projects for the production of terephthalic acid (PTA) and polyethylene terephthalate (PET).

In November 2023, Kazakh President Kassym-Jomart Tokayev announced the beginning of construction on a butadiene plant with an annual capacity of up to 340,000 tonnes.

Kazakh Deputy Energy Minister Askhat Khasenov has said that the first phase of the project would be launched at the end of 2025 and the second at the end of 2026. An estimated US$1 billion was invested in the project in 2023. Khasenov said that the plant was to produce around 100,000 tonnes of rubber per year after the launch of the two phases, supplying it to Saran-based KamaTyresKz LLP, a joint venture of Russia’s Tatneft and Kazakhstan’s Allur.

Butadiene LLP is a joint venture for the production of butadiene and its derivatives. Interestingly, the plant is licensed by Lummus Technology of the United States, which grants rights to use the technology and basic engineering at its four production units. The feedstock for the production process will be supplied by the Tengiz and Korolev oil fields in Kazakhstan.

We previously discussed the upcoming trend for US corporates to invest in Russia’s production and supply chain developments here.