Page 12 - FSUOGM Week 36 2019
P. 12
FSUOGM INVESTMENT FSUOGM
China to invest in massive methanol plant in Far East
RUSSIA
The plant would be fed with gas from fields in western Yakutia.
CHINESE Sirius Holding plans to build the world’s largest methanol plant in Russian Far East with capacity of 7.2mn tonnes annually and total investment of RUB740bn ($11bn), Kom- mersant daily reported on September 4 citing unnamed sources close to the deal and antici- pating an official announcement at this week’s Eastern Economic Forum.
Reportedly, the plant would get its gas from Western Yakutia fields to be supplied by pipe- lines under the Sea of Okhotsk. The refinery could produce almost 10% of global output of methanol and more than Russia’s annual output of methanol of 4.5mn tonnes in 2018.
Sirius representatives told Kommersant it counted on tapping into other gas fields in West- ern Yakutia, which have not been covered by the Power of Siberia (Sila Sibiri) pipeline to Western China. Sirius also reportedly intends to attract Chinese Chengzhi, the Silk Road Fun, the Rus- so-China Regional Investment Fund, Far East Development Fund and banks to the project.
Analysts surveyed by Kommersant ques- tioned the scale of the project, noting that gas extraction in Yakutia would not support such refining volumes, while seeing the planned methanol capacity as excessive even for the growing Chinese market.
Alltech seeks buyer for gas fields
RUSSIA
Alltech had planned to use the gas to produce LNG with Rosneft.
RUSSIAN private investor Alltech is seeking buyers for a pair of fields that had been expected to provide gas from a now-shelved LNG export project, Moscow-based Kommersant reported on September 2.
Alltech, controlled by Russian businessman Dmitry Bosov, wants to sell the Korovinskoye and Kumzhinskoye deposits in the far northern Nenets region, sources told the newspaper. It has offered the projects to a wide range of buyers, they claimed.
Korovinskoye and Kumzhinskoye contain 160bn cubic metres of gas and 3.9mn tonnes of condensate in ABC1+C2 reserves. Alltech had initially wanted to use these resources to under- pin Pechora LNG. It partnered in 2015 with Rosneft to implement the project, transferring a 50.1% stake to the state oil company.
It became clear that Korovinskoye and Kumzhinskoye were only large enough to pro- duce 5mn tonnes per year of LNG or less. The pair had hoped to secure rights to two more nearby gas fields, in order to double the project’s
planned capacity to 10mn tpy. However, they were defeated at a state auction for the deposits by Gazprom.
The project’s small size and remoteness had raised doubts about its feasibility. This perhaps explains why the government decided not to grant the partners a licence to export LNG, effec- tively leaving their resources stranded without a market. The pair also considered construction of a gas-based petrochemical plant at the site, but this plan too was dismissed as unrealistic.
Rosneft sold its share in the venture back to Alltech last year, citing the lack of development prospects.
Korovinskoye and Kumzhinskoye represent Alltech’s last remaining assets, with the company now focused primarily on coal development. FSU OGM considers Gazprom the most likely buyer of the fields, given their close proximity to the Layavozhskoye and Vaneyvisskoye deposits that the company outbid Rosneft for in 2016. Gazprom intends to develop these sites jointly with Lukoil.
P12
w w w . N E W S B A S E . c o m Week 36 11•September•2019
