Gazprom and Sibur ink MOU for Belogorsk project
The Russian companies Gazprom and Sibur materialized in a memorandum of understanding (MOU) their intention to build a gas processing plant (GPP) and a petrochemical complex at Belogorsk in the Amur Region of the Far East Russia.
This project is a consequence of Eastern Gas Program approved in September 2007 by the Ministry of Industry and Energy to develop and monetize the giant gas fields of Eastern Russia.
Through this program, Gazprom is developing the Chayandiskoye and Kovykstinskoye gas fields and is working to an export pipeline to supply its Vladivostock liquefied natural gas (LNG) project.
With 42 trillion cubic feet (tcf) recoverable reserves of natural gas, Chayandiskoye is the master piece of the oil and gas rich Yakutia State in Eastern Russia, while Kovykstinskoye gas field will bring more than 52 tcf recoverable reserves of gas from the Irkutsk Region.
Since Gazprom is working on the pipeline transportation system from the different gas fields in Far East Russia to supply its Vladivostock LNG project, Belogorsk appeared to be ideally located on the way to the southeast coast to build a petrochemical complex.
In this context, Sibur takes the opportunity of the massive quantity of gas and condensate carried on along Gazprom pipeline transportation system to pick up competitve feedstock for its petrochemical complex.
Gazprom and Sibur priced gas for Belogorsk cracker
Through their MOU, Gazprom and Sibur are considering to build a:
- Petrochemical complex.
The gas processing plant should have the mission to treat and separate the natural gas and condensate.
With a capacity of 6 million cubic feet per day (cf/d) the Belogorsk gas processing plant should be operated by Gazprom
Instead Sibur should build and operate the Belogorsk petrochemical complex including a:
- Olefins units
- Polyolefins units
By the MOU, Gazprom and Sibur defined the guide lines to calculate the transfer prices on the ethane and to coordinate the construction of Belogorsk GPP and Petrochemical projects.
This agreement is following the previous MOU signed in December 2012 between Gazprom and the German gases and engineering company Linde for the supply of helium.
According to this MOU, Gazprom and Linde will cooperate in the gas separation for the production of helium in the Belogorsk project.
Originally Gazprom had the intention to develop the Belogorsk project on its own, but the size and complexity of the interconnected production units motivated Gazprom to cooperate with specialists in each respective unit.
Since the Vladivostock LNG project is due to come on stream in 2018, Gazprom is multiplying the alliances with key partners such as Linde and Sibur to speed up the design and construction of its Belogorsk gas processing plant and petrochemicall complex.
