SIBUR and Sinopec plan two joint ventures and extend their cooperation

Beijing, 11 October 2011. Within the framework of the working visit to China by Prime Minister of the Russian Federation Vladimir Putin, one of the world's largest energy and chemical companies, China Petroleum and Chemical Corporation (Sinopec Corp.) and Russia’s leading petrochemical holding company SIBUR have entered into a Memorandum of Extended Cooperation on the possible formation of two joint ventures for the production of nitrile rubber (NBR) in Krasnoyarsk (Russia) and Shanghai (China). The Parties are also considering cooperating in the area of polyisopren rubber (IR) and in other areas, including the petrochemical feedstock supply and the supply of unconventional sources of feedstock to Russia and China. In addition they have agreed to hold talks about co-operation opportunities in upstream and downstream.

If joint ventures are formed, SIBUR will provide polymerization and finishing technology for two of them. The existing NBR assets of the Krasnoyarsk rubber plant in Russia will be expanded to 56,000 tons per year, and the Shanghai facility will have a production capacity of approximately 50,000 tons per year.

Commenting on the cooperation and development, Sinopec express that the two joint ventures will strengthen the friendly cooperation relationship between Sinopec and SIBUR, this is another step towards Sinopec’s commitment to service China’s rapidly growing manufacturing sector for Chinese fast increasing market demands.

“SIBUR has advanced technologies for the production of the synthetic rubber, which in partnership with Sinopec will serve the growing needs of Chinese industry”, said SIBUR’s CEO Dmitry Konov commenting on the joint ventures. “We are satisfied with the dynamics of negotiation and hope to make a deal”.

Background information:

Sinopec Corp. (www.sinopec.com) is ranked 5th by sales revenue on the Forbes Global 2000 list (2011) and 5th on the Fortune Global 500 list (2011). Sinopec Corp.'s business incorporates oil and gas exploration, oil refining, petrochemical production, mineral fertilisers, and oil and gas transportation. Sinopec Corp. is ranked No. 2 in the world in terms of oil refining capacity and No. 4 by ethylene production. The company leads the Chinese market in the production of petrol, diesel, synthetic rubber, polymers and fertilisers. Sinopec Corp. posted revenues of more than CNY 1.9 trillion (USD 273 billion) in 2010 and employed over 678,000 people. The company's principal shareholder is state-owned Sinopec Group (China).

SIBUR (www.sibur.ru) is the leading petrochemicals company in Russia and Eastern Europe. Its production chain includes gas refining, the production of monomers, plastics, rubber, mineral fertilisers, tyres and industrial rubber goods, and the processing of plastics.In 2010, SIBUR has processed more than 17.4 billion m3 of associated petrol gas and produced more than 16,5 million tons of various petrochemical products. SIBUR’s revenue in 2010 reached 239 billion roubles (over US$ 7,5 billion). SIBUR Holding CJSC's shareholders are private entities. The functions of the company's sole executive body are performed by the management company SIBUR LLC.