RUSSIAN state-owned oil giant Rosneft has signed a non-binding agreement with Chinese state-owned chemical company ChemChina to further implement the Far-Eastern Petrochemical Company (FEPCO) joint venture (JV) project.
The deal, which entitles Rosneft to 60% of the project and ChemChina 40%, was signed by Rosneft CEO Igor Sechin and ChemChina president Ren Jianxin during the G20 summit, currently taking place in Hangzhou, China. ChemChina also signed a memorandum of understanding with Saudi Aramco and the National Industrial Clusters Development Program (NICDP) as part of the summit last week in order to explore chemical investment opportunities in Saudi Arabia.
The document also specifies the timetable for front end engineering and design (FEED) work, the start of site infrastructure preparation, and outlines the milestones in the execution for the petrochemical and crude oil refining project to be built near Nakhodka, Russia.
“The formation of the JV will allow us to efficiently structure the development of one of the most promising petrochemical projects in the world with direct access to the Asian-Pacific market,” said Sechin.
Rosneft said in 2015 that the project will begin with the installation of 12m t/y crude oil refining facilities by 2020 in phase one. Phase two will involve the installation of petrochemical facilities with capacity of 3.4m t/y. The company estimated a cost of approximately RUB660bn (US$10.2bn) for the first two phases including infrastructure costs.
A third phase which will further increase the crude oil refining capacity by 12m t/y and increase petrochemical capacity by 3.4m t/y, was reported by Chemicals Technology. The petrochemical complex will produce 1.4m t/y of ethylene, 600,000 t/y of propylene, 230,000 t/y of benzene, and approximately 200,000 t/y of butadiene and 50,000 t/y of linear alpha-olefins in the first two phases, making it the world's biggest steam cracker by volume.
There were conflicting reports as to when phase two of the project would be complete. The Chemical Engineer contacted Rosneft to corroborate the additional reports, but did not receive a response.
In May, Rosneft also formed a JV with Indonesian state oil and gas firm Pertamina to implement a 300,000 bbl/d Tuban refining and petrochemicals complex in East Java.
Separately, Reuters reported today that the Russian government is looking to sell a 19.5% stake in Rosneft for around US$11bn due to recent low oil prices.
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