A subsidiary of China National Chemical Engineering Co (CNCEC) is to build a major gas and chemical complex in Russia.

China National Chemical Engineering No. 7 Construction Company (CC-7) has signed a contract worth about €12 billion with Baltic Chemical Complex, a subsidiary of RusGazDobycha, to build the complex near Ust-Luga in the Gulf of Finland.

The contract covers front-end engineering and design services as well as engineering, procurement and construction.

According to RT, the Russian television network CNCEC’s chairman Dai Hegen said it is the largest ethylene integration project in the world and the biggest contract ever signed by a Chinese enterprise.

The complex will take five years to build and will be implemented in three phases. It will include two ethane crackers, each producing 1.4 million t/y ethylene, as well as six PE plants of 480,000 t/y each, two butene-1 units of 62,000 t/y each and two hexene-1 plants, each  producing 75,000 t/y.

CNCEC said it will continue to tap the Russian market and “promote pragmatic cooperation for mutually beneficial and win-win results.”

In March 2019, RusGazCobycha and Russian gas giant Gazprom decided on the final configuration of the gas complex at Ust-Luga. It will produce 13 million t/y of liquefied natural gas (LNG), more than 2.2 million t/y liquefied petroleum gas (LPG) and up to 4 million t/y of ethane, which will feed the chemical complex.

Alexey Miller, chairman of Gazprom’s management committee, said the “ambitious project is simply unparalleled in Russia.” He commented: “Within a short time, we are going to build the most powerful gas treatment and liquefaction plant in the country. Together with the technically affiliated gas chemical facility, it will grow into a large modern industrial cluster in the northwest of Russia.”

Miller added that combining LNG and ethane production within one industrial site will benefit the economics of the project, allowing it to considerably mitigate resource and price risks. Gazprom said the gas complex will make it possible to increase Russian LNG exports and to increase LPG exports by 30-40%.