SIBUR Signs an Agreement to Sell its LPG Rail Cars Fleet to Rail Garant

Moscow, 13 November 2013. SIBUR and Rail Garant, a freight transportation group, have signed an agreement on sale of SIBUR’ fleet of liquefied petroleum gas (LPG) rail cars to Rail Garant.

The deal is expected to be closed following all the necessary approvals, including the approval of regulators.

The LPG rail car fleet owned by SIBUR includes 4,364 tank cars. The deal value is valued at RR 11.5 billion.

According to the agreement, following the transaction the entire fleet will be operated by SIBUR-Trans, SIBUR’s freight operator. Half of the fleet will be leased, and the other half may be used by SIBUR-Trans for product transportation under a service contract. The contracts are valid for six years, thus, reinforcing SIBUR’s ability to transport required volumes of its own products while generating return on investments made earlier into the rail car fleet.

SIBUR-Trans will continue its operations within SIBUR Group to ensure reliable transportation of the Company's products and help develop non-public railway tracks.

SIBUR-Trans transport fleet currently includes 13,113 LPG tank cars, including 4,364 tank cars in ownership and 8,749 tank cars in lease or in operation. Additionally, SIBUR-Trans either owns or operates 3,870 tank cars for petrochemical products, 2,013 LPG tank containers, 386 tank containers for liquid cargo, and 16 all-purpose cars. SIBUR-Trans also operates public railway tracks of a total length of 330 km.

The transaction will enable Rail Garant Group to become a major player at the growing LPG transportation market and will guarantee full utilization of the fleet in spite of prevailing surplus of rail cars at the market.

The LPG transport fleet currently operated by Rail Garant Group comprises 1,500 tank cars and 1,608 tank containers. The Group also operates 6,132 tank cars for crude oil and gasoline and 1,953 tank containers for liquid chemicals.

Notes to editors:

SIBUR is a uniquely positioned vertically integrated gas processing and petrochemicals company. SIBUR owns and operates Russia’s largest gas processing business in terms of associated petroleum gas processing volumes and is a leader in the Russian petrochemicals industry.

As of 30 June 2013, SIBUR operated 27¹ production sites across Russia and employed more than 28,000 personnel. The Group serves over 1,500 large customers operating in the energy, automotive, construction, fast moving consumer goods (FMCG), chemical and other industries in approximately 60 countries.

SIBUR’s subsidiary ZAO Sibur-Trans, a licensed railway operator, is responsible for handling rail logistics, including purchasing of transportation services from Russian Railways and acting as a rail car fleet operator. ZAO Sibur-Trans handles transportation within Russia as well as our export deliveries. We own six railway loading racks used for loading and unloading NGLs into rail tank wagons and operate an extensive rail car fleet.

Rail Garant Group is one of the leaders of Russian railway transportation market of industrial goods.

The wide range of transported goods includes coal, iron ore, ferrous metals, non-ferrous metals and raw materials for their production, refined petroleum products, liquefied gases and chemicals.

Rail Garant ranked 4th in Russian market of rail car operators (Infranews Research Agency)

The total fleet of the Group consists of 35 000 rail cars (gondola cars, box cars, tank cars, flat cats, cement cars, rail car transporters) and tank-containers.

Annual traffic volume reached 35,5 mln tons.

Shareholders of Rail Garant Group are Sergey Smyslov and Sergey Guschin

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