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Rosneft, ChemChina delegations visit FEPCO construction site
05 September 2015
Delegations from Rosneft and ChemChina visited the construction site for FEPCO’s oil refining and petrochemical facilities located by Yelizarov Cape. The plan and progress of the project implementation were presented to the delegations.
Earlier, the parties signed a Memorandum of Understanding regarding probable acquisition of controlling stake in FEPCO by ChemChina.
Once phase one is complete, the facility is scheduled to refine 12 mmt a year and produce 8.5 mmt of engine fuels. The second phase is expected to boost the annual output by 3.4 mmt and secure the release of 3 mmt of petrochemical products.
The project also envisages the creation of a thermal power plant, which may then be contributing to the power grid of Primorye Territory, Russia, and the thermal grid of the urban district of Nakhodka.
Preliminary investment amount, necessary for implementation of phases one and two is estimated approximately at RUB660 bln, VAT included. This should also cover infrastructure costs.
Should the market environment allow it, the facility’s output may be increased in the future.
The oil refining hub will produce motor gasoline, kerosene, diesel and bunker fuel, etc. Phase two will allow for the production of 15+ polyethylene and polypropylene brands that are of a multi-zone of applications and in demand across the promising APR markets.
The hub will allow creating a powerful petrochemical cluster in Primorye Territory, which should give impulse to domestic production and create new jobs, while also resulting in exportation of domestically produced high added value end products.
Commenting on the meeting results, Igor Sechin stated, “The Company is interested in attracting a strategic partner to the project. We estimate our partnership with the Chinese partners regarding ongoing joint projects positively. We expect further development of this mutually beneficial cooperation with ChemChina.”
Note for editors:
The “Far East Petrochemical Company Oil Refining and Petrochemical Hub Construction” project provides for creation of the largest refining/petrochemical complex of Russian Far East (FEPCO) that is expected to:
- eliminate local shortage of motor fuels and high prices for them in the region;
- lay the foundation for a future petrochemical cluster;
- develop infrastructure and accompanying production in the Far Eastern Federal District of Russia;
- deliver high added value products to replace exportation of raw materials;
- get extra profit by selling new products in APR markets;
- create new jobs in the region.
Rosneft and ChemChina have signed the Heads of Agreement on their cooperation in equity investment in ChemChina Petrochemical Corporation (CCPC) and a Memorandum of Understanding for cooperation on the project of the Far-East Petrochemical Company (FEPCO).
The documents were signed by the Chairman of Rosneft Management Board Igor Sechin and the Chairman of ChemChina Ren Jianxin during the visit of the Russian President Vladimir Putin to Beijing and in presence of the President of People's Republic of China Xi Jinping.
The FEPCO Memorandum concerns ChemChina's proposed acquisition of a majority stake in FEPCO project as well as the key stages of such investment. By signing the memorandum, Rosneft involves a strategic partner for FEPCO project and makes a major step towards its development.
Rosneft Information Division
Tel.: + 7 (499) 517-88-97
September 5, 2015