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Gazprom, SIBUR pool efforts to build processing complex in Russia’s Far East

November 02, 2013, 23:24 UTC+3

Gazprom is planning to construct a gas processing plant in Belogorsk with the annual capacity of up to 60 bcm

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МOSCOW , November 2 (Itar-Tass) - Russia’s gas monopoly Gazprom and SIBUR, a major petrochemical company in Russia, have signed a memorandum of cooperation for the construction of a gas processing plant and a gas chemical complex in Belogorsk, Amur Region, in the Far East.

The document outlines the framework for joint efforts of the parties for prospective construction of a large-scale multi-component gas processing complex. The feedstock is expected to be sourced from natural gas production centres in Yakutia and Irkutsk that Gazprom is developing under the Eastern Gas Programme.

Gazprom is planning to construct a gas processing plant in Belogorsk with the annual capacity of up to 60 bcm, where ethane and other valuable components will be stripped from natural gas. SIBUR is considering construction of a petrochemical complex, technologically connected with the GPP, to process ethane and produce monomers and polymers.

The memorandum lays out general mechanisms for pricing of ethane supplies, coordination of the projects implementation and provision of synergies.

“The efficient and reasonable use of all the valuable components of natural gas from eastern fields is a priority of Gazprom’s comprehensive activities in Russia's East. The partnership with SIBUR is a sample model of Gazprom’s cooperation with other investors within the Eastern Gas Programme: Gazprom creates a resource base and facilities for production, transmission and initial processing, while our partners construct capacities for chemical processing and manufacturing of value added products. The joint activities will result in a considerable economic effect and become an extra incentive for developing Eastern Siberia and the Far East,” Gazprom CEO Alexei Miller said at the signing ceremony at the company’s headquarters on Friday, November 1.

Dmitry Konov, SIBUR’s CEO, said: “SIBUR is continuously looking for new opportunities to develop its petrochemical business, strengthening its leading positions in Russia and tapping into new target export markets. Our partnership with Gazprom will enable to unlock potential of cooperation of upstream and downstream producers to create highly-competitive capacity for deep processing of hydrocarbons into value-added petrochemical products. Implementation of such global-scale projects in new gas producing regions requires careful coordination and detailed planning”.

The Chayandinskoye and Kovyktinskoye fields (gas reserves amounting to some 1.2 and 1.5 trillion cubic metres of gas respectively) are the cornerstones of the Yakutia and Irkutsk gas production centres being a part of the state-run Eastern Gas Program. The Program was approved in September 2007 by the Ministry of Industry and Energy of the Russian Federation. Gazprom was appointed by the Russian Government as the Program execution coordinator.

In order to convey gas from the Yakutia and Irkutsk gas production centres via Belogorsk to Vladivostok Gazprom is planning to construct the Power of Siberia gas transmission system.

SIBUR is a vertically integrated gas processing and petrochemical company, which owns and controls Russia’s major gas processing business in terms of associated gas output and which is the leader of the Russian petrochemical industry.

The company operates in 27 production sites throughout Russia. SIBUR sells its products to over 1,500 major consumers engaged in the fuel and energy complex, car manufacturing, construction, basic goods manufacturing, chemical and other industries in about 60 countries of the world.

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