Gazprom signs contracts for setting up Complex for processing ethane-containing gas near Ust-Luga

June 10, 2020

– 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.