Rosneft, Sinopec to Study Feasibility of Building a Gas Processing Plant in Russia

Rosneft and China Petrochemical Corporation (Sinopec Group) have signed a framework agreement on joint pre-feasibility study of the project related to the construction and operation of a gas processing and petrochemical complex in East Siberia.

The parties also decided to choose a consultant for the project management and identified competitive challenges and the time to fix them before entering the stage front-end engineering design (FEED). “In the event of successful outcomes as stipulated by the framework agreement, it is supposed to create a joint venture between Rosneft and Sinopec in 2017,” Rosneft said on Monday.

The project will meet the growing demand for polyethylene and polypropylene in Russia and in China. It is assumed that the annual capacity of the new complex near the administrative center of Boguchany District will be 5 billion cubic meters of gas yielding up to 3 million tonne  of polymers and petrochemical products primarily for sale on the Russian and Chinese markets. The resource base of the project comprises Rosneft oil and gas fields of Yurubcheno-Takhomsky cluster in East Siberia.

The document was signed in the presence of Russian President Vladimir Putin and Chinese President Xi Jinping by Rosneft CEO Igor Sechin and Chairman of Sinopec Group Wang Yupu.

Meanwhile, Rosneft and Beijing Enterprises Group Company Limited have signed heads of agreement for cooperation in various areas of the oil and gas business.

In particular, the parties agreed on the potential sale by Rosneft to a designated subsidiary of Beijing Enterprises Group of 20 percent shares in Verkhnechonskneftegaz, a Rosneft subsidiary. The binding agreements on the transaction is expected to be signed in Q4 2016..