PJSC Tatneft : TATNEFT and KazMunayGas Have Set Up a Joint Venture

The companies have signed a corporate agreement on the operation of the Butadien LLP joint venture for the project implementation for the production of butadiene rubbers.

The document has been signed by Nail Maganov, General Director of PJSC TATNEFT, and Alik Aidarbayev, Management Board Chairman of JSC NC KazMunayGas.

The plans provide that the production will be launched in 2026 at the territory of the SEZ "National Industrial Petrochemical Technopark" (Free Economic Zone) in the Atyrau region of the Republic of Kazakhstan. There will be about 2,000 jobs created at the site of the new production facility at the construction period stage, and more than 700 job positions at the stage of the facility's operation.

The planned capacity of the enterprise will reach up to 180 thousand tonnes of butadiene and butadiene rubbers per year. The shares of KazMunayGas and TATNEFT in the project will amount to 25 percent and 75 percent, respectively. The preliminary cost of the project is estimated at about 1 billion US dollars, and the parties are considering options for financing the project, including through borrowed funds.

It is assumed that raw materials will be supplied from the Tengiz and Korolev fields in Kazakhstan. The plans provide for finished products to be sent to a tyre manufacturing factory in the Karaganda region, as well as for export to European countries, Russia, China, Turkey, etc.

Earlier, Nail Maganov, General Director of TATNEFT, and Alik Aidarbayev, Management Board Chairman of NC KazMunayGas, signed an Agreement on the basic interaction terms of the Butadien project (https://www.tatneft.ru/press-tsentr/press-relizi/more/8362?lang=ru), as well as a roadmap for the project implementation, a framework agreement and agreed on an action plan for cooperation.

Nail Maganov, General Director of TATNEFT:

"TATNEFT has big plans in petrochemistry, and we are happy to develop this area together with our Kazakh partners. Kazakhstan is a strategic partner for us. We already have the collaborative experience, as we now also apply joint efforts in the construction of the tyre manufacturing factory in the Karaganda region, and this is the practical implementation of the Strategy for the economic integration of the countries - members of the Eurasian Union.

We have assured ourselves once again that Kazakhstan has created the most comfortable conditions for the implementation of large-scale investment projects. I am confident that a new joint venture for the production of butadiene rubbers will contribute to strengthening the economies of our countries and the well-being of our people".

Alik Aydarbayev, Chairman of the Management Board of JSC NC KazMunayGas:

"In accordance with the Development Strategy our company seeks to expand the value chain of the company's products and is actively developing the petrochemical industry in the Republic of Kazakhstan. Establishment of a joint venture between KazMunayGaz and TATNEFT is the evidence of this. I am sure that the project will contribute to the establishment of partnership relations between Kazakhstan and Tatarstan, and will also diversify the economy of our country".

Forward-looking statements: This press release contains certain statements regarding future events and expectations, which are forward-looking in nature. Any statement in this press release that is not a historical fact is a forward-looking statement that involves known and unknown risks, uncertainties and other factors that could cause actual results, performance or achievements expressed or implied by such forward-looking statements to differ materially. PJSC TATNEFT shall assume no obligation to update such forecasts to reflect actual results, changes in assumptions or changes in factors affecting these statements.

Reference Information

About JSC NC KazMunayGas:

JSC National Company KazMunayGas (KMG) is a leading vertically integrated oil and gas company in Kazakhstan. KMG manages assets throughout the entire production cycle from exploration and production of hydrocarbons to transportation, refining and the provision of specialized services. The company, which was founded in 2002, promotes the interests of Kazakhstan in the country's oil and gas industry.

About PJSC TATNEFT:

PJSC TATNEFT is one of the largest Russian oil companies, which dynamically develops the oil and gas production, oil refining, petrochemicals, a tyre manufacturing complex, a network of filling stations, power engineering, development and production of equipment for the oil and gas industry and operates a block of service structures.