Moscow, 12 March 2013. SIBUR and TNK-BP have signed a set of agreements that define the format of cooperation between the parties within OOO Yugragazpererabotka, an APG processing joint venture (JV), for the period from 2017 through 2026.
The parties have extended the key agreements related to the supply of associated petroleum gas (APG) and purchase of dry gas and natural gas liquids (NGLs) that are products of APG processing. Both have also revised the guaranteed APG volumes that will be supplied by TNK-BP to Nizhnevartovskiy and Belozerniy GPPs as part of the JV. The parties have extended the term of the JV for an indefinite period of time, while terminating the call option agreements(1).
The agreements further strengthen the long-term, mutually beneficial partnership between SIBUR and TNK-BP. During the past five years of successful cooperation, SIBUR and TNK-BP have significantly increased the volumes of APG processed by the JV’s GPPs. In 2012, Yugragazpererabotka processed over 12.5 billion cubic metres of APG, a 9% increase from 2011 and a 71% surge against 2007 levels – the year when the JV was established.
In 2012, Yugragazpererabotka completed a number of important investment projects, including the construction of a third compressor station at the Nizhnevartovskiy GPP. The project facilitated an increase in APG processing volumes at the GPP by 760 cubic metres to 6.2 billion cubic metres per annum. Joint capital expenditures on the project totaled approximately RR 2.7 billion net of VAT.
Information on OOO Yugragazpererabotka
OOO Yugragazpererabotka is a joint venture between SIBUR (51%) and TNK-BP (49%) established in 2007. Yugragazpererabotka owns and operates three gas processing plants (Nizhnevartovskiy GPP, Belozerniy GPP and Nyagan GPP), three compressor stations, and APG pipelines from the compressor stations to the GPPs.
(1) In connection with the change in the term of the joint venture to an indefinite period, the parties have terminated the call option agreements, effective 12 March 2013. These agreements formed the basis for consolidating Yugragazpererabotka as a wholly-owned subsidiary in SIBUR’s financial statements, while TNK-BP’s contribution was accounted for as an interest-bearing long-term loan. Following the termination of the call option agreements, SIBUR plans to account for its investment in Yugragazpererabotka in accordance with IFRS 11 Joint Arrangements.
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