Gazprom has signed a preliminary agreement to supply ethane from the Amur Gas Processing Plant (GPP) to Sibur‘s proposed Gas Chemical Complex (GCC) at the site, which will include a plant to produce roughly 1.5 million t/y of PE.

Sibur said the complex will be technologically connected to the GPP, processing ethane and producing monomers and PE grades to meet both Russian and global demand.

The GPP will treat natural gas along with producing liquefied petroleum gas (LPG), pentane-hexane fraction, helium and ethane fraction. The treated natural gas will be supplied to China via the Power of Siberia gas pipeline.

“This agreement is an important step in developing the Amur GCC project and unleashing the potential of the gas processing and gas chemical sector in the Russian Far East,” said Dmitry Konov, chairman of Sibur Holding’s management board.

Under the terms of the contract, Gazprom will supply 2 million t/y of ethane fraction to the Amur GCC under a formula pricing arrangement. Sibur said the deal will now enable it to design production capacity of optimal size and start front-end engineering and design (FEED).

The GPP, located near Svobodny in the Amur region, will be the largest gas processing facility in Russia and one of the biggest in the world, according to Gazprom.  It will receive multi-component gas from the Yakutia and Irkutsk gas production centers, which Gazprom is establishing within the Eastern Gas Program.

Construction of the six-train complex started in October 2015 and will be commissioned in stages, synchronized with Gazprom’s development of its gas capacities in Yakutia and Irkutsk. It will have a design processing capacity of 4.2 billion m³ of natural gas per year, with an annual production of 60 million m³ of helium, around 2.5 million t of ethane, 1 million t of propane, 500,000 t of butane and 200,000 t of pentane-hexane fraction.

Gazprom Pererabotka Blagoveshchensk, part of the Gazprom group, is in charge of the project while Sibur subsidiary Nipigaz is acting as general contractor. Germany’s Linde is providing the core process equipment for the cryogenic recovery of helium and other petrochemicals from gas.

When the plant opens, it is expected to employ around 3,000 people.