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Gazprom and partners move forward with multibillion-dollar export-oriented gas-chemical project

May 22/2020

MOSCOW (MRC) -- Gazprom (Moscow) and its partners are moving ahead with a multibillion-dollar, export-oriented gas-chemical project at Ust Luga, near St Petersburg, Russia, according to Chemweek.

Gazprom is building the upstream natural gas processing and liquefaction complex, which will process ethane-containing gas and will be the anchor project of the major gas processing and chemical cluster being established in the region. Gazprom says that basic design has been agreed on and design documentation is being drawn up. Site clearing is in progress and project financing is being arranged with Russian and international credit institutions.
The complex will process 45 billion cubic meters/year of gas and produce around 13 million metric tons/year (MMt/y) of liquefied natural gas (LNG), 3.8 MMt/y of ethane, 2.4 MMt/y of liquefied petroleum gas (LPG), and 0.2 MMt/y of pentane-hexane fraction. The 19 billion cubic meters/year of gas remaining after processing will be directed into Gazprom's gas transmission system. The ethane produced by the complex will be processed by the gas-chemical facility to produce up to 3 MMt/y of several grades of polyethylene (PE). The first trains of the new complex will come onstream in the fourth quarter of 2023 to be followed by the remaining trains in the fourth quarter of 2024.
The partners plan to submit the design documentation to the government this year for review, place orders for long-lead equipment items, and select an engineering, procurement, and construction (EPC) contractor for the gas processing units and off-site facilities, as well as an EPCM contractor for project management.
The plan for the export-oriented gas-chemical project was first unveiled at last years St Petersburg International Economic Forum by Gazprom and partners. The operator of the complex is RusKhimAlyans, a special-purpose company owned equally by Gazprom and RusGazDobycha (Moscow). The gas-chemical facility is being set up by the Baltic Chemical Co, a subsidiary of RusGazDobycha, another special-purpose company.
The chemical complex will comprise two ethane crackers, each with capacity for 1.4 MMt/y of ethylene, and downstream units including six PE lines with combined capacity for 3 MMt/y. The complex will also have capacity for 274,000 metric tons/year of linear alpha-olefins (LAO), 75,000 metric tons/year of hexene-1, and 10,000 metric tons/year of butene-1. On completion, Baltic Chemical Co. will become a major producer of PE in Russia, close to the countrys leader, Sibur (Moscow).
Most of the technology and engineering contracts covering the downstream project have already been placed. Lummus Technology will provide the process design package, engineering, and the license for the olefin production and recovery units. China National Chemical Engineering Co. (CNCEC; Beijing) is the main contractor. CNCECs scope of work includes front-end engineering design and an EPC contract for the crackers, PE and LAO units, and off-site facilities.
As MRC reported previously, in early January, 2020, Gazprom Export and Gazprom Armenia signed an additional agreement to the contract for Russian gas supplies to the Republic of Armenia. In accordance with the agreement, the price of natural gas at the border between Georgia and Armenia will not change starting from January 1, 2020, and will remain at the level of 2019. Gazprom Armenia, a wholly-owned subsidiary of Gazprom, is focused on natural gas supplies to the Armenian market. In addition, the company transports, stores, distributes and sells natural gas, as well as upgrades and expands the gas transmission system and underground gas storage facilities in the Republic of Armenia. The contract between Gazprom Export and Gazprom Armenia for the supplies of up to 2.5 billion cubic meters of Russian gas per year will be in effect until the end of 2020.

Ethylene is the main feedstock for the production of polyethylene (PE).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 557,060 tonnes in the first three month of 2020, up by 7% year on year. High density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments rose because of the increased capacity utilisation at ZapSibNeftekhim. Demand for LDPE subsided.
Author:Margaret Volkova
Tags:PE, LLDPE, LDPE, HDPE, ethylene, gas processing, petrochemistry, Gazprom, Armenia.
Category:General News
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