Gazprom and SIBUR Sign a Memorandum of Cooperation on Future Project in the Far East

Moscow, 1 November 2013. Today, Alexey Miller, Gazprom’s Chairman of the Management Committee, and Dmitry Konov, SIBUR’s CEO, signed Memorandum of Cooperation in the gas processing project in Far East that envisages construction of a gas processing plant (GPP) and a petrochemical complex in Belogorsk, the Amur Region.

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

In Belogorsk, Gazprom is considering construction of a GPP of 60 bcm annual capacity that will separate ethane and other gas fractions. 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.

Alexey Miller commented, “One of the priorities of Gazprom’s comprehensive efforts in the East of Russia is to ensure effective and rational utilization of all the valuable components of the eastern fields’ gas. Our partnership with SIBUR is an excellent example of Gazprom’s cooperation with other investors in the framework of the Eastern Gas Programme – Gazprom is developing a resource base and constructing upstream and midstream facilities, while our partners are building facilities for petrochemical processing and production of high value-added products. Such cooperation will make significant contribution to economic growth and spur development of the East Siberian and the Far Eastern regions.”

Dmitry Konov commented, “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”.

Notes to editors:

Chayandinskoye (natural gas reserves of approximately 1.2 trillion cubic meters) and Kovyktinskoye (natural gas reserves of approximately 1.5 trillion cubic meters) fields form a basis for the Yakutia and Irkutsk gas production centres under the state Eastern Gas Programme. The Programme was approved in September 2007 by the Decree of the Russian Industry and Energy Ministry, and Gazprom was appointed execution coordinator by the Russian Government.

Gazprom is considering construction of gas transmission system Power of Siberia for transporting natural gas from the Yakutia and Irkutsk gas production centres via Belogorsk to Vladivostok.

SIBUR is a uniquely positioned vertically integrated gas processing and petrochemicals company. SIBUR owns and operates Russia’s largest gas processing business in terms of associated petroleum gas processing volumes and is a leader in the Russian petrochemicals industry.

As of 30 June 2013, SIBUR operated 27[i] production sites across Russia and employed more than 28,000 personnel.  The Group serves over 1,500 large customers operating in the energy, automotive, construction, fast moving consumer goods (FMCG), chemical and other industries in approximately 60 countries.

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Gazprom

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