Russia’s EuroChem Group and the Chinese National Chemical Corporation (ChemChina) signed a memorandum of intent to establish joint industrial production of thus-far imported propylene oxides and isocyanates in Russia during the Saint Petersburg International Economic Forum (SPIEF), EuroChem CEO Dmitry Strezhnev said on Thursday.
The production plans include, among others, methylene diphenyl diisocyanate (MDIs), commonly used in the development of synthetic lubricants, surfactants, polyurethanes and toluene diisocyanate (TDIs), essential for the production of heat insulation materials.
The parties agreed to form a working group to assess technical feasibility of the project and conduct a comprehensive financial and legal due diligence analysis. At preliminary estimates, the project will cost around $500 million.
If successful, the project will be implemented at EuroChem’s Novomoskovskiy Azot plant in the Tula Region.
Besides ending reliance on imports of such products within both Russia and the Commonwealth of the Independent States, the project can help Russia become a world market for future production of propylene oxides and isocyanates, while increasing Russian and Chinese investments due to the growing demand for such products in both countries.