Rosneft and Chinese in Russian Projects
Russian oil company Rosneft has signed separate deals with Chinese organisations Sinopec and ChemChina for two petrochemical projects in Russia. The agreements were announced on Jun. 25 during Russian president Vladimir Putin’s visit to Beijing. Rosneft CEO Igor Sechin and Sinopec chairman Wang Yupu signed a framework agreement to carry out a joint pre-feasibility study for a gas processing and petrochemicals complex to be built in eastern Siberia.
Under the agreement, the companies will select technology for processing natural gas to polymers and appoint a consultant to manage the project. They said they had identified competitive challenges as well as the time required to address them before entering the front-end engineering and design (FEED) phase.
Annual capacity is likely to be 3m t/y of polymers and petrochemicals, primarily targeted to meet growing demand in both Russia and China. A timescale for the project was not divulged but the parties anticipate creating a joint venture in 2017. Sechin also inked a heads of agreement with ChemChina chairman Ren Jianxin to cooperate on the previously announced Far Eastern Petrochemical (Fepco) project near Nakhodka in eastern Russia.
ChemChina will take a 40% stake in Fepco and provide proportional financing. A one-year crude oil supply contract is also part of the deal. The two parties will conduct a joint analysis aimed at specifying niche markets for Fepco’s output based on the capabilities of each partner’s position in Asia-Pacific markets.
Sechin said bringing ChemChina into the development of what will be one of Russia’s largest industrial complexes, will enable Rosneft to optimize the project financing and co-organize the sale of high-margin products into premium markets. In October 2015. Rosneft signed a Memorandum of Understanding with Pirelli and Synthos to progress the synthetic rubber plant which is part of the Fepco cluster.
