Kazakhstan to build its first tire plant, butadiene project with Tatneft

London — Kazakhstan's national vertical integrated oil and gas company Kazmunaygas (KMG) and Russia's Tatneft started the construction of an automotive tire plant in Saran, Karaganda region in central Kazakhstan April 5 under a 2019 memorandum of understanding between the two companies, KMG said.

The companies also agreed to go ahead with a butadiene rubber production project in Kazakhstan's Atyrau region before 2025, where around 186,000 mt of butadiene rubber and 170,000 mt of isobutane will be produced. Butane feedstocks from the local oil and gas producer Tengizchevroil will be used for this project, KMG said.

The Kazakh national company said that the partnership with Tatneft will create an integrated domestic tire production, while also will make the product available for export into Europe, Russia, China, Turkey and other countries.

Meanwhile, this will be the first synthetic rubber and tire production facility newly built in Kazakhstan, since the only tire factory in Shymkent built during the Soviet times was fully shutdown in 2007 after several changes in ownership.

The SBR market was struggling in 2019 and 2020 due to economic pressures on the automotive sector, as well as the fallout from the global pandemic.

However in 2021, feedstocks tightness and global outages have started to support the steady rise in SBR prices. ESBR 1500-1502 prices in Europe have increased by more than 30% since January to be last assessed at Eur1,725/mt ($2,035.59/mt) FD NWE April 1, S&P Global Platts data showed.