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. Last Updated: 07/27/2016

Gazprom Plans Huge Petrochemical Plant

TYUMEN -- A venture backed by Gazprom plans to build the world's biggest polypropylene plant in the Siberian town of Tobolsk, Tyumen region Deputy Governor Alexander Moor said Monday.

Moor said the venture, led by Gazprom's chemicals arm, Sibur, and up to 30 percent owned by gas firm Novatek, had already signed a deal to invest more than $2 billion in the plant.

"It would be the biggest production of polypropylene in the world. It would cover most of Russia's needs for this material. The rest would go for exports," Moor told a news conference.

Asked how the venture would fund the project, Moor said: "Bond issues and probably share issues."

He also said the local administration would give tax breaks to help the project.

Sibur and Novatek unveiled the idea of building the plant in February, saying Novatek would supply the gas for the plant if it went ahead.

Moor said that in the first, three-year stage, which is already underway, the venture would invest $1 billion to launch the plant in 2010, when it would triple the country's annual polypropylene output of 270,000 tons and produce 500,000 tons of polyethylene.

The second phase, set to run from 2010 to 2013, will lift the plant's polypropylene production to 1.3 million tons per year, he said.