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EastRussia Bulletin: Gazprom and SIBUR agree on supplies of ethane in the Priamurye cluster - EastRussia | Far East

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EastRussia Bulletin: Gazprom and SIBUR agree on supplies of ethane in the Priamurye cluster

EastRussia Bulletin: Gazprom and SIBUR agree on supplies of ethane in the Priamurye cluster
Photo: EastRussia
Gazprom and SIBUR concluded the main contract for the supply of ethane from the Amur Gas Processing Plant (the Gazprom project as part of gas supplies to China via the Siberia-Siberian gas pipeline) to the Amursky Chemical Combine within the framework of the St. Petersburg International Economic Forum (SPIEF-2018) "SIBUR"), is spoken in the next published issue of the bulletin EastRussia.

According to the specific conditions, the raw materials will be supplied to the Amur MCC within 20 years in the volume of about 2 million tons per year. Conditions for future supplies were fixed in the preliminary supply agreement concluded by SIBUR and Gazprom within the framework of the Russian Investment Forum in Sochi (February 2018). The conclusion of the contract will allow achieving certainty in terms and speeding up the discussion of conditions and the establishment of a joint venture with foreign partners.

In the future, a consortium of Chinese companies may become a partner of SIBUR in the project of the Amur MCC, while negotiations are only with Sinopec (owns 10% of SIBUR). The transfer of the Chinese company 49% of the enterprise is discussed, while control will remain with SIBUR. The question of the structure of financing is still being worked out. It is assumed that SIBUR and Sinopec in proportion to the shares in the JV will contribute 15% of the project cost as initial investment, 15% will be a share loan, the rest - project financing. The parameters, however, may change.

The cost of the Amur MCC is tentatively estimated at about 500 billion rubles. ($ 8 billion). The final investment decision is not yet available, but after the conclusion of the contract, SIBUR intends to enter it by the middle of 2019. The volumes of gas supplies stipulated in the contract will allow AHCC to produce about 1,5 million tons of polyethylene per year. However, it is only after the launch of the fourth line of the GPP that Gazprom can supply enough gas for its production. According to the current construction schedule, it should be completed in 2024-2025 years. The first stage of the GPP is expected to be launched by the end of 2019, the approximate date of commissioning of the Amur MCC is 2021 year.

Also, Gazprom continues to consider the possibility of licensing new sites from the undistributed subsoil fund of the Far East - the company announced an auction to develop technical and economic proposals for the development of the South Nedzhelinsky site in Yakutia, adjacent to the Sobolokh-Nedzhelinsky gas condensate field owned by the company.

A detailed analysis of this and other relevant topics can be found in the weekly bulletin EastRussia (https://www.eastrussia.ru/subscribe/).