SIBUR – MOVING TO INTERNATIONAL STANDARDS. EXPERIENCE IN PRACTICE

1. SIBUR– MOVING TO INTERNATIONAL STANDARDS.EXPERIENCE IN PRACTICE AlexanderKryukov, Head of Centre «Technological Processes Exploitation and Standardization», SIBUR LLC April,2-4, 2014, Houston, USA

2. MAIN GOALS AND TASKS OF RUSSIAN TECHNICAL REGULATION AND STANDARDIZATION IN RUSSIAN OIL&GAS COMMUNITY GOALS TASKS • Russian Oil&Gas Complexintegration with global economic system and international standardizationas an equal partner • Developing of requirements for technical and qualitative indices of products considering world scientific and technological achievements • Providing of best conditions for manufacturinginnovative products and efficient us of energy recourses • Lowering of unreasonable technical barriers • Providing of sci-tech and technologicalsafety for Russian Federation • Modernization of Oil&Gas industry • Increasing of competitiveness for Russian Oil&Gas products • Raising the role of standardizationin technological processes of Oil&Gas industry 2

3. Technical regulations of the customs union developed for oil&gas complex and planned to be developedin 2014 by russian federation Planned to be developed in 2014 Developed On requirements forautomobile and jet fuel, diesel and marine fuels, propellants and residual fuel oil(active since31.12.2012) On safety of the oil нефти prepared for transportation and (or) use Amendments to the Customs Union Regulation «On requirements for automobile and jet fuel, diesel and marine fuels, propellants and residual fuel oil» (internal state reconciliation) On requirements forlubricating materials, lubricating oils andtechnical liquids(active since01.03.2014) On safety of natural gas prepared газа горючего природного, подготовленного for transportation and (or) use Requirements for liquid petroleum gases intended for use as fuels(public discussion) On safety of engines and equipment (active since15.02.2013) On requirements for trunk pipelines for transportation of liquid and gas hydrocarbons On safetyfor operating in volatile media(active since 15.02.2013) On safety of mechanisms operating with gas fuels(active since 15.02.2013) On safety of equipment operating under excessive pressure(active since01.02.2014) On chemical safety(active since June, 2017)

4. COMPANY WORKS WITHIN VERTICAL-INTEGRATED MODEL… Natural gas LPG, naphtha, raw NLG MTBE Oil companies Raw oil fields Basic polymers Fuel and raw material segment Petrochemical segment (PP, PE) Liquid hydrocarbon raw (APG) Synthetic rubbers 47% of revenue Raw and gas oil fields 48% of revenue Plastics and organic synthesis products 9 production sites 18 production sites Semi-finished products and other petrochemical products (LPG) Oil and gas companies Raw materials supplied by the customer Methanol

5. ... DEVELOPS4 MAINBUSINESSES … • Production of liquid petroleum gases • Production of basic polymers (PP, PE, PVC) • Production of plastics and organic synthesis products • Production of synthetic rubbers 5

6. …PRODUCTION IS USED IN DIFFERENT INDUSTRIAL AREAS… 268products manufactured, 232 – according toTechnical Conditions and36 - GOST (GOST R) polypropylene Производство нефтехимической продукции, млн. тонн polyethylene polyvinylchloride polystyrene foam ABS-plastics basic polymers (polypropylene, polyethylene) plastics and organic synthesis products suspended PVC benzene, styrene, ethylene oxide glycols MTBE, plastic products Semi-finished products and other petrochemical Products synthetic rubbers

7. SYNTHETIC RUBBER MANUFACTURING– THE FIRST Sibur business oriented to international standards Reasons to move to international standards: • The export volume of SIBUR synthetic rubbers is about 59% • Overage national standardsfor testing methods WhyASTM? • 80% of our international customers deal withASTM standards • High technical quality • ASTMtransparency for all interested parties • Permanent actualization of standards • ASTM willingness to cooperate with Russia • More than 35 000 ASTMmembers from 125 countries • More than 12 000 standards • ASTMconsider WTO «Technical barriers to trade» agreement 7

8. Main stages of the transfer to astm standards The program is implemented within 3 years • Prioritizingof ASTMstandards • Involving Russian rubber consumers • Implementing of new standards – buying equipment, implementation of methods in testing laboratories, gathering statistics • Developing ASTM-based national standards (GOST R) • Certification of end products according toGOSTR/ ASTMfor internal and exportrubber markets • Taking part in interlaboratory crosscheck programs at the national level • Taking part in interlaboratory crosscheck programs underASTMInternational guidance 8

9. Results achieved 14 GOST R/ASTM developed, came into forcefrom July,2013: 9

10. Results achieved Since 2012 SIBURis a member of ASTMINTERNATIONAL technical Committee D11 10

11. Results achieved • Since 2013 almost all manufacturers and consumers of synthetic rubbers in Russian Federation operate in accordance withASTM standards • Since 2012 SIBUR regularly initiates interlaboratory crosscheck programs under «PTP ASTM – VNICSMV» (Proficiency Testing Programs) • More than 10 Russian testing laboratoriesannually participate in interlaboratory crosscheck programs in order to prove their competency 11

12. Further cooperation withASTMINTERNATIONAL • Participation inD 11 ASTM Technical Committee activities • Sharing experience with testing laboratories in USA • New ASTM pilot projects for Russia, examplevideo training coursesfor ASTM standards in Russian language: 12

13. THANK YOU FOR YOUR ATTENTION! 13