News Post
Gazprom and SIBUR cooperate on LPG and Ethane supply in Amur region
Alexey Miller, Chairman of the Gazprom Management Committee, and Dmitry Konov, Chairman of the Management Board of SIBUR Holding (on behalf of the Amur Gas Chemical Complex), signed a preliminary contract at the 5th Eastern Economic Forum in Vladivostok.
Dmitry Konov, Chairman of the Management Board at SIBUR Holdings stated “The signing of the agreement opens up an opportunity for us to increase the amount of hydrocarbon feedstock to be processed in Russia. If we opt for an extended version of the project, LPG will be processed domestically instead of being exported, thus providing additional feedstock for related industries and enabling us to manufacture more high-tech export-oriented products”.
Gazprom’s Amur GPP treats natural gas to be supplied to China and also produces LPG, pentane-hexane fraction, helium, and ethane fraction. In turn, SIBUR is developing the project to construct Amur GCC, which would be integrated with the GPP in a single technology chain to process ethane and LPG into polymers for the domestic and global markets.
The document outlines the basic terms of reliable long-term supplies of LPG and additional volumes of ethane fraction from the Amur Gas Processing Plant (GPP) to the future Amur Gas Chemical Complex (GCC) of SIBUR. Taking into account the contract for ethane fraction supplies (about 2 million tons per year) signed by the parties in May 2018, the overall amount of ethane fraction and LPG deliveries may total up to 3.5 million tons per year at prices based on formulas agreed by the parties. As a result, SIBUR will be able to increase GCC output from 1.5 MMtpy of polyethylene to 2.3 MMtpy of polyethylene and 400,00 tpy of propylene.
The preliminary agreement will enable SIBUR to continue working on the extended version of its Amur GCC project and make FID by the end of 2019.
The enhanced cooperation between the companies will help set up a major gas processing and chemical cluster in the Amur Region, spurring socio-economic development in the Russian Far East, creating skilled jobs at the plants and associated industries, boosting the local tax base n and around the town of Svobodny.
Alexey Miller and Dmitry Konov also signed a Coordination Agreement. The parties intend to look into the possibility of joining forces in implementing investment projects, namely the gas processing facility in the Republic of Tatarstan and the Novy Urengoy Gas Chemical Complex in the Yamal-Nenets Autonomous Area.
Source: Gazprom
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