Gazprom neft and SIBUR Pool Efforts for Gas Treatment in East Siberia and the Far East

Gazprom neft JSC and SIBUR Holding JSC signed their memorandum of understanding in the sphere of gas treatment and processing in East Siberia and the Far East.

Under this agreement, SIBUR will perform the analytical study for building of gas-processing facilities in the Irkoutsk Oblast, Krasnoyarskiy Territory and other regions of East Siberia and the Far East. This analytical study is to result in optimal selection of geographic locations for GPP to be based on Gazprom neft and other subsoil users’ deposits, as well as in identification of gas volumes, gas component structure, and end-product transportation routes.

On its part, for the analysis purposes Gazprom neft will provide its forecast data on the associated petroleum gas and natural gas production volumes in the above-specified regions, and on the gas component structure to be supplied for gas processing. Also, the company will offer the optional sites for GPP construction.

Upon accomplishment of the study, the parties will resolve on practicability of the project realization, the possible form of partnership and the project-financing outlay.

Reference Information:

In April 2009, SIBUR and TNK-BP Management JSC signed a similar Memorandum of Understanding for associated petroleum gas (APG) processing in the Irkoutsk Oblast. The document provides an opportunity to pool the companies’ efforts for building of gas-processing production facilities in the region on the basis of raw-resource deposits now being developed by the oil company. By results of the feasibility study (FS) undertaken by SIBUR, the parties will resolve on practicability of their joint participation in construction of new production facilities in the Irkoutsk Oblast.

Development of gas processing in the Eastern part of Russia depends to a great deal on the state participation in building of the related infrastructure as well as on availability of long-term commercial agreements on APG supplies between the project operator and subsoil users prior to the start of processing facilities’ construction.