Page 9 - FSUOGM Week 12 2021

FSUOGM POLICY FSUOGM

Russia approves subsidy for

petchem feedstock

RUSSIA RUSSIAN companies that process ethane and producer Sibur and another developer Rus-
LPG will be supported with a subsidy starting gazdobycha. Sibur is advancing the Amur Gas
The reverse excise tax next year, the government reported on March Chemical Complex (GCC) in the Far East,
has been provided for 14, as part of efforts to support the petrochemi- which will receive ethane and LPG from Gaz-
naphtha-based projects cals industry. The move was approved by Prime prom’s neighbouring Amur Gas Processing
for several years now. Minister Mikhail Mishustin. Plant (GPP). The Amur GCC will produce up
This reverse excise tax has been provided to 2.8mn tpy of polyethylene and polypropyl-
for petrochemicals projects that use naph- ene, using 2mn tpy of ethane and 1.5mn tpy of
tha, produced as a by-product of oil refining, LPG as its feedstock.
for their feedstock for several years. But the Sibur chairman Dmitry Konov warned in
majority of up and coming petrochemical February 2020 that the Amur GCC’s realisation
projects in the country are set to run instead would depend largely on whether the reverse
on ethane and LPG, produced during gas excise tax was introduced. The company closed
processing. a deal to form a joint venture with China’s Sino-
Starting January 2022, the reverse excise tax pec to develop and operate the facility. Sibur will
will amount to RUB9,000 ($121) per tonne of have a 60% position in the $10-11bn project,
ethane and RUB4,500 per tonne for LPG. To while Sinopec will have 40%.
be eligible for the subsidy, the enterprise apply- Sibur might also seek to maximise benefits
ing for it will have to invest at least RUB65bn from the subsidy by expanding the Zapsibneft-
($877mn) in 2022 to 2027. They will need to ekhim petrochemicals complex in Western Sibe-
conclude investment deals with authorities on ria, which was commissioned last year.
projects and report their implementation. Fur- Another company that stands to gain from
thermore, these projects will need to have pro- the support is Rusgazdobycha, which intends
cessing capacities of at least 300,000 tonnes per to launch a large-scale GCC on the Baltic Sea in
year (tpy). 2023-2024. That facility will also receive feed-
The main beneficiaries of the project are stock from a Gazprom GPP. It will produce up to
likely to be Russia’s largest petrochemicals 3mn tpy of polymers. ™

Russia supplies Armenia with gas via

Azerbaijan for first time in 30 years

ARMENIA RUSSIA is to supply gas to Armenia via Azerbai- other as attempts are made to turn the ceasefire
jan for the first time in 30 years, according to an agreement, brokered by the Kremlin to freeze the
Armenia usually announcement from Gazprom Export. conflict, into a durable settlement. The helping
receives Russian gas Armenia usually obtains its Russian gas—on hand Azerbaijan will play with the gas deliveries
via Georgia but that which it is dependent—from a pipeline that runs should help in that.
pipeline is offline for through Georgian territory, but repair works, "The contract stipulates that during sched-
repairs. expected to last for three weeks, are set to inter- uled preventive maintenance work on the
rupt the flow. Russian section of the North Caucasus-Tran-
Gazprom Export said it has signed a short- scaucasian gas pipeline, gas will be supplied to
term contract with Azerbaijani national consumers through Azerbaijan to the border
energy company SOCAR for the trans- with Georgia," Gazprom Export said.
portation of Armenia-bound gas through In 2020, Gazprom supplied 2.209bn cubic
Azerbaijan. metres of gas to Armenia. In the first month of
There is, of course, a diplomatic angle to this year, supplies increased by 9% y/y to 310mn
this—Russia, which has 2,000 peacekeeping cubic metres.
troops in around the Nagorno-Karabakh enclave In December, Gazprom Export and Gazprom
over which Armenia and Azerbaijan fought a Armenia extended the contract under which
six-week war last autumn, has been attempting Russia supplies Armenia with gas to cover the
to persuade the foes to talk directly with each first quarter of this year. ™

Week 12 24•March•2021 www. NEWSBASE .com P9