Irkutsk Polymer Plant-equipment deliveries for polyethylene project

For the Irkutsk Polymer Plant (IZP) under construction at Ust-Kut, a large shipment of equipment was shipped at the South Korean port of Masan in June.  A total of 45 units were shipped to Masan, with a total weight of 4,500 tons.  The largest unit of equipment was the deethanizer with a length of 81.9 metres, and weight 357 tons.   Also, included the equipment deliveries comprised a polymerization reactor with a length of 44.5 metres and a weight of 597 tons.  All equipment was manufactured at factories in Japan, Korea and China.

The delivery route to Ust-Kut includes transportation along the Northern Sea Route through the port of Tiksi.  On the route section from the Chukchi Sea to the Laptev Sea, ships with cargo are then escorted by Atomflot icebreakers.  Oversized equipment is expected to be loaded with ship cranes onto nine river barges by mid-July. Then the barges, accompanied by tugboats, will head up the river Lena.

Arrival of the first barges at Ust-Kut is expected no earlier than the second half of August. By the end of September, all barges are planned to be unloaded, and the equipment delivered by specialized modular vehicles to the prepared sites.

The production capacity of the polyethylene plant at Ust-Kut will be 650,000 tpa.  Natural and associated as produced at fields in Ust-Kut and other northern regions of the region (Yaraktinsky)will supply the raw materials. Irkutsk Polymer expects to create 1,200 permanent new jobs (7,000 at the construction stage) from the project in addition to helping expand the economy in the Irkutsk Oblast. 

Irkutsk Oil Company cannot supply gas to Russian consumers as the market is too distant and there is no infrastructure to provide a connection.  At the same time despite being located near to the Power of Siberia gas pipeline to China, only Gazprom has the right to use this route thus ruling out this option for INK.  Thus, the company has decided the most logical usage of gas would be to produce polyethylene. 

Besides the polyethylene plant ThyssenKrupp Industrial Solutions is building a liquid helium at Ust-Kut for Irkutsk oil Company with a capacity of 10 million litres per annum.  Commissioning of the enterprise is scheduled for 2022.

Amur Gas Processing Plant-equipment deliveries

The season for the delivery of licensed heavy oversized equipment for the Amur Gas Processing Plant (GPP) is currently open.  Delivery of equipment from the South Korean port of Masan is sent to the port of De Kastri.  The first and largest batch of the 2020 season includes a demethanizer with a transport weight of 860 tons.

The equipment arrived in Russia in late May (using a crane ship) from the South Korean port of Masan to the port of De Kastri.  The crane ship was unloaded on 4 barge-tow trains which took around 25 days over the journey of 2,500 km  The delivery route extends 237 km by sea from the port of De Kastri to Nikolaevsk-on-Amur, another 1923 km along the Amur River finally the hardest part of the journey along Zeya River of around 212 km to the terminal which is near the site of the gas processing plant under construction.  The Zeya River is narrow with numerous rifts and also requires deepening the fairway in shallow water.  It requires constant adjustment of the ship's charts due to the fact that its fairway can change several times during navigation.  Daily monitoring of the water level and weather forecast are carried out which is fundamental at the stage of transportation of heavy oversized equipment. 

In the 2020 season, the total volume of deliveries of bulky and heavy cargo scheduled for delivery to the Amur GPP amounts to 43 pieces of equipment with a total weight of about 8,000 tons. The transportation of heavy oversized equipment for the Amur GPP is carried out by the Special Project together with Combi Lift GmbH under a contract with Linde AG.

The design capacity of the Amur Gas Processing Plant comprises 42 billion cubic metres per annumr of gas (six production lines with a capacity of 7 billion cubic metres per annum each), which makes the enterprise one of the most powerful gas processing plants in the world.  Also, the Amur GPP will include the world's largest helium production with a capacity of 60 million cubic metres per annum. 

In addition to natural gas and helium, GPP's commercial products will be ethane, propane, butane, and pentane-hexane fraction.  Ethane is intended for sale to the proposed Amur Gas Chemical Complex.   Until the plant is built, the ethane fraction will go to China as part of natural gas at no extra charge.

SIBUR-Sinopec jv for Amur Gas Chemical Complex

SIBUR and Sinopec signed a shareholder agreement for the Amur Mining and Chemical Combine in June 2020, and companies are currently working on regulatory approvals.  SIBUR and Sinopec have signed a shareholder agreement to create a joint venture for the Amur Gas Chemical Complex project.  SIBUR plans to place 5-year Eurobonds in the amount of $500 million. 

In May 2020, SIBUR announced that Sinopec had already received all the necessary corporate approvals to create a joint venture with SIBUR for the Amur Mining and Chemical Combine project.  If SIBUR makes a final investment decision for the project, Sinopec plans to participate in the joint venture with a 40% stake.  SIBUR tentatively estimates investments in the creation of the Amur MCC as $10.7 billion.

The Amur MCC will be technologically connected with the Amur Gas Processing Plant (GPP) of Gazprom, from which it will receive ethane as a raw material.  The Amur Mining and Chemical Combine will produce monomers with the subsequent production of polyethylene of brands that are in demand on the Russian and world markets.

SIBUR is considering the possibility of implementing the project in one of two configurations : base (capacity of 1.5 million tons / year of ethylene), which involves the processing of the  ethane fraction , which will come from the Amur GPP in the amount of up to 2 million tons / year; expanded (capacity 2.7 million tons / year of finished products), which provides for the processing of liquefied petroleum gases ( LPG ) from the Amur GPP in the amount of about 1.5 million tons / year.

The commissioning of the first capacities of the Amur MCC is expected no earlier than 2023-2024. In technological connection with the Sibur Amur Gas Chemical Complex (MCC), the Amur Gas Processing Plant  will lead  to the creation of the largest gas processing and gas chemical cluster in the Amur Region, which will become the driver of the economic and social development of the Far Eastern Federal District.

Baltic Gas Chemical Complex-gas agreement with Gazprom

Gazprom signed the largest gas supply contract in June with Ruskhimalliance concluded for a period of twenty years as part of a project to create a complex for processing and liquefying ethane-containing gas in the Ust-Luga region.   The volume of deliveries will be 45 billion cubic metres per annum. 

Ruskhimalliance and the Baltic Chemical Complex (a 100% subsidiary of Rusgazdobycha), a contract was signed for the supply of ethane fraction for further processing at a gas chemical plant connected with the integrated complex.  The enterprise will process ethane received from the complex and produce up to 3 million tpa of various grades of polyethylene.  

The agreement with Baltic Chemical Complex LLC, signed on the same day, provides for the supply of ethane fraction for further processing at a gas chemical enterprise technologically connected with the integrated complex.  In parallel, work was organized to attract project financing from Russian and international credit organizations. Engineering surveys were carried out at the construction site, in May preparations were made for the start of work.

In October 2019, Rusgazdobycha signed a FEED and an EPC contract with the China National Chemical Engineering Group Corporation (CNCEC).  Investments in the implementation of the project are expected to amount to more than 700 billion roubles.  The revenue is expected to reach more than $4 billion per annum. 

In November 2019 Baltic Chemical Complex entered into licensing agreements with Lummus Technology on ethylene production technology.   The gas-chemical enterprise will process ethane obtained from the complex and produce up to 3 million tpa of various grades of polyethylene.

The project provides for the construction of 2 ethylene cracking units with a capacity of 1.4 million tpa each (total capacity 2.8 million tpa).  Six polyethylene production units with a capacity of 480,000 tpa with a total capacity of 2.88 million tpa, in addition to two plants for the production of linear alpha-olefins with a capacity of 137,000 tpa (274,000 tpa in total).  Other parts of the investment include factory facilities.  Dates of plant start-synchronized for the first place in the fourth quarter of 2023, and the second stage in the fourth quarter of 2024.  

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