Russia and China mull petrochemicals JV

The two groups are reported to be discussing linking up to establish a jointly funded refining and petrochemicals complex in the Primorsky Region of eastern Russia. The complex, expected to be completed in two stages by 2014, would be capable of processing 20 million tpa of crude oil, Bloomberg News agency quoted Sinopec as saying.

The overall investment of up to $22m, will also cover the construction of related infrastructure including pipelines, a power station and oil-loading port. In October, a team of Sinopec managers were said to be evaluating the project which would be located in Primorye.

The scheme would benefit both Russia and China. Russia, the world’s biggest energy exporter, wants foreign capital to help it develop its sparsely populated Far East and east Siberian regions. China, the globe’s fastest growing economy, needs Russian resources to help meet its rapidly rising energy demand.

In 2007, Rosneft and Sinopec Group signed an agreement to develop natural gas and oil deposits off Sakhalin Island in eastern Russia.

Rosneft is a leading oil producer in Russia with seven refineries spread across the country. Its main plastics manufacture is carried out at the Angarsk refinery in southern Siberia. The Angarsk Polymer Plant produces a range of products including ethylene, propylene and polyethylene and had an overall output of 401,000 tpa in 2008. The firm also produces petrochemicals at some other sites.

A modernisation programme for Angarsk plant was drawn up last year to include raise ethylene/propylene capacity, the installation of new units for polypropylene, high density and linear low density polyethylene.