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United States : SIBUR and Rail Garant sign SALE agreement
Publish Date : 18-Nov-2013
SIBUR and Rail Garant signed an agreement on sale of SIBUR' fleet of liquefied petroleum gas (LPG) rail cars to Rail Garant. The deal will be closed after all the necessary approvals, including the approval of regulators. The LPG rail car fleet owned by SIBUR comprises 4,364 tank cars. The deal value is valued at RR 11.5 billion.
As per the agreement, after the transaction the whole fleet will be operated by SIBUR-Trans, SIBUR's freight operator. Half of the fleet will be leased, and the other half may be used by SIBUR-Trans for product transportation under a service contract. The contracts are valid for six years. This will boost SIBUR's ability to transport required volumes of its own products generating return on investments made earlier into the rail car fleet.
SIBUR-Trans will continue its operations within SIBUR Group to assure reliable transportation of the Company's products and to develop non-public railway tracks. SIBUR-Trans transport fleet now comprises 13,113 LPG tank cars, including 4,364 tank cars in ownership and 8,749 tank cars in lease or in operation. Additionally, SIBUR-Trans either owns or operates 3,870 tank cars for petrochemical products, 2,013 LPG tank containers, 386 tank containers for liquid cargo, and 16 all-purpose cars. SIBUR-Trans also operates public railway tracks of a total length of 330 km.
The transaction will allow Rail Garant Group to be a major player at the growing LPG transportation market. It will guarantee full utilization of the fleet in spite of prevailing surplus of rail cars at the market. The LPG transport fleet now operated by Rail Garant Group comprises 1,500 tank cars and 1,608 tank containers. The Group also runs 6,132 tank cars for crude oil and gasoline and 1,953 tank containers for liquid chemicals.
SIBUR owns and operates Russia's biggest gas processing business as per associated petroleum gas processing volumes. It is a leader in the Russian petrochemicals industry. Rail Garant Group is one of the leaders of Russian railway transportation market of industrial goods.
