Moscow, 21 February 2014. Rosneft and SIBUR have agreed to increase guaranteed supplies of associated petroleum gas (APG) from Rosneft's oil fields to Yugragazpererabotka's processing facilities to 10 bcm per annum for the period through 2032. The new agreement was signed by Igor Sechin, President of Rosneft and Chairman of the Management Board, and Dmitry Konov, CEO of SIBUR.
The APG price will be formula-based and indexed in line with changes in prices for APG derivatives: dry gas and raw natural gas liquids (raw NGLs). Under this agreement, SIBUR will sell dry gas produced at Nizhnevartovskiy and Belozerniy gas processing plants to Rosneft.
Rosneft undertakes not to invest in projects that can have a negative impact on the composition of APG supplied to Yugragazpererabotka. SIBUR guarantees processing of all APG volumes supplied by Rosneft and will expand its two compressor stations.
Under the agreement, SIBUR will also purchase a 49% share in the Yugragazpererabotka joint venture from RN-Holding, increasing its interest in the joint venture to 100%.
The deal will be closed subject to all necessary approvals.
Igor Sechin, President of Rosneft, said: " The agreement to increase our APG supplies to SIBUR is perfectly in line with our gas strategy as it will help us monetise Rosneft's gas potential, hit the 95% target ratio of associated gas utilisation across Rosneft's fields, and produce high value added gas-derived products."
Dmitry Konov, CEO of SIBUR, said: "By signing the agreement with Rosneft to increase associated petroleum gas supplies, SIBUR reaffirms its commitment to the corporate strategy of securing long-term access to feedstock. The extended tenor of the APG contracts highlights the strong ties between SIBUR and Rosneft, which remains the key APG supplier for SIBUR's gas processing facilities. SIBUR will continue offering Rosneft an effective APG utilisation solution while securing a steady flow of valuable petrochemical feedstocks to its plants."
RN-Holding owned 49% in Yugragazpererabotka, a joint venture that owns and operates three gas processing plants (GPPs): Nizhnevartovskiy, Belozerniy and Nyagangazpererabotka, along with the pipeline infrastructure that transports APG from compressor stations to the GPPs. The total capacity of Yugragazpererabotka's processing plants is 13.4 bcm per year.
SIBUR (www.sibur.com) 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 September 2013, SIBUR operated 27[i] production sites located all over Russia, had over 1,500 major customers engaged in the energy, automotive, construction, fast moving consumer goods (FMCG), chemical and other industries in approximately 60 countries worldwide and employed over 28,000 personnel.
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