Key contracts signed as part of project for setting up Complex for processing ethane-containing gas near Ust-Luga

– Supply contracts signed for feed gas and sales gas, as well as ethane fraction.

– EPC contract signed for gas processing and off-site facilities within integrated complex.

A number of key contracts were signed today in St. Petersburg as part of the project for the creation of the Complex for processing ethane-containing gas (including an integrated complex for natural gas processing and liquefaction, as well as a gas chemical complex) in the Leningrad Region.

Gazprom and RusKhimAlyans (the project operator of the integrated complex for natural gas processing and liquefaction; the company was established on a parity basis by Gazprom and RusGazDobycha) signed 20-year commercial contracts for supplies of feed gas and sales gas. Thus, the integrated complex will be provided with raw materials for the long term.

The documents establish the following pattern of cooperation. Ethane-containing natural gas will be supplied from Gazprom's fields to RusKhimAlyans in the amount of 45 billion cubic meters per year. The gas remaining after the processing (extraction of ethane fraction and other valuable components) and production of liquefied natural gas will go into the Company's gas transmission system in the amount of approximately 18 billion cubic meters per year.

In addition, a contract was signed between RusKhimAlyans and Baltic Chemical Complex (a wholly-owned subsidiary of RusGazDobycha) to supply ethane fraction for further processing at the gas chemical facility technically affiliated with the integrated complex. The supply period under the contract is 20 years.

RusKhimAlyans entered into an EPC contract with NIPIGAZ (part of the SIBUR Group) for a full cycle of operations to create gas processing and off-site facilities at the complex. The contractor will prepare the working documentation, ensure the delivery of equipment & materials and the execution of construction & installation and start-up & commissioning works, and provide integration services for the complex and its off-site facilities.

By now, NIPIGAZ completed a set of engineering surveys and developed basic technical solutions for RusKhimAlyans under the contract signed in September 2019. Currently, design documentation is being drafted for the gas processing facilities.

Later on, RusKhimAlyans will select ЕРС contractors to build natural gas liquefaction facilities, a storage facility for raw materials and marketable products, a marine shipment terminal, and other non-production facilities. An ЕРСМ contractor will be chosen to carry out integrated management of the construction process for the integrated complex.

Background

Gazprom and RusGazDobycha are implementing the project for a natural gas processing and liquefaction complex near the settlement of Ust-Luga, with the RusKhimAlyans special-purpose company as the project operator. It is the anchor project of the major gas processing and chemical cluster that is being established in the region.

The complex will have the largest capacity in Russia in terms of gas processing and will be the largest in northwestern Europe in terms of liquefied natural gas (LNG) production (13 million tons per year). In addition to LNG, its commercial products will include ethane fraction, liquefied petroleum gases, and pentane-hexane fraction.

RusGazDobycha will be responsible for the construction of the technically affiliated gas chemical facility that will process ethane generated by the complex and produce up to 3 million tons of various polyethylene grades.

NIPIGAZ (part of the SIBUR Group) is Russia's leading center for design, supplies, logistics and construction management. The company takes part in the implementation of a number of major gas processing and oil refining projects in Russia, including the construction project for Gazprom's Amur Gas Processing Plant.

Source: gazprom.com