Gazprom Neft, SIBUR and Titan Group agreed to establish a joint venture based on the existing polypropylene (PP) business owned by Poliom at the Omsk refining and petrochemical complex in Russia, officials said on Tuesday.

As part of the deal, Sibgazpolimer, a joint venture of SIBUR and Gazprom Neft (each having a 50% stake), acquired a 50% stake in Poliom from Titan Group.

Under the agreement, Gazprom Neft is to supply Poliom with raw materials (propane propylene fraction from the Omsk refinery), with SIBUR to sell Poliom’s products through its distribution network.

“We are convinced that SIBUR’s competencies in polypropylene production and solid understanding of the Russian polymer market will contribute to enhancing Poliom’s operational excellence and performance,” said Dmitry Konov, SIBUR’s CEO.

This partnership will help enhance the efficiency across the entire production chain, from feedstock delivery to sales.

“The acquisition of Poliom’s stake by Gazprom Neft will provide the plant with smooth feedstock supplies to manufacture high quality petrochemicals, improve our refining efficiency and add value across all production stages,” said Anatoly Cherner, deputy CEO for logistics, processing and sales at Gazprom Neft.

Poliom’s board of directors is to consist of an equal number of representatives of Titan Group and Sibgazpolimer, with the plant’s operations handled by CEO. Currently, this position is held by Oleg Moloshtanov.

“Cutting-edge production facilities with a high level of environmental protection, advanced technologies, and highly-qualified personnel enabled Omsk to become a market leader within the very first year of operations,"said Mikhail Sutyaginsky, chairman of the Titan Group board of directors. "I believe that the majors’ engagement in the project will help increase investor appeal of the Omsk region and boost SME development, marking the growing point of various industrial sectors in Russia."