15/02/2018

Press release: SIBUR and Gazprom sign a preliminary agreement to supply ethane to the Amur GCC

Sochi, 15 February 2018. During the 17th Sochi 2018 International Investment Forum, SIBUR and Gazprom entered into a preliminary agreement setting out the key commercial terms for the supply of ethane from Gazprom’s Amur Gas Processing Plant (GPP) to SIBUR's Amur Gas Chemical Complex (GCC). The document was signed by Dmitry Konov, Chairman of the Management Board of SIBUR Holding, and Valery Golubev, Deputy Chairman of the Management Committee of Gazprom.

Gazprom’s Amur GPP will treat the natural gas intended for China and also produce liquefied petroleum gas, pentane-hexane fraction, helium and ethane fraction. SIBUR, in its turn, is planning to build the Amur GCC with an annual capacity of about 1.5 mt of polyethylene, which will be technologically linked to the GPP and engaged in the processing of ethane and production of monomers and polyethylene grades enjoying Russian and global demand.

Pursuant to the preliminary agreement, Gazprom will annually supply approximately 2 mt of ethane fraction to the Amur GCC under the formula pricing arrangement, Entering the preliminary agreement makes SIBUR well poised to design production capacity of optimal size and start the FEED process. For Gazprom, it will secure the relationship with a reliable consumer of valuable gas feedstock produced at the Amur GPP.

This partnership will foster the creation of the largest gas processing and gas-chemical cluster in the Amur Region to boost the economic and social development of the entire Far Eastern Federal District. The cluster will enable the processing of the hydrocarbon feedstock from the Amur GPP into in-demand, high added-value products, while also creating over 4,000 skilled jobs at the GCC and the GPP, and more than 5,000 jobs in associated industries, and enhancing the social, transport, and service infrastructure of the town of Svobodny in the Amur Region. It should also significantly boost tax payments to state and municipal budgets.

“This agreement is an important step in developing the Amur GCC project and unleashing the potential of the gas processing and gas chemical sector in the Russian Far East,” said Dmitry Konov, Chairman of the Management Board of SIBUR Holding.

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