Page 13 - FSUOGM Week 41 2021

FSUOGM POLICY FSUOGM

Rosneft still waiting on subsidies

for FEPCO petchem project

RUSSIA ROSNEFT CEO Igor Sechin remains in talks September 2019. The company had failed to
with the Russian finance ministry on securing find investment partners and had difficulty
FEPCO will handle support for its Far Eastern Petrochemical Co. working out a means of supplying the complex
240,000 bpd of oil in (FEPCO) project in the Russian Far East, the with raw materials.
its first phase. Russian energy chief said during a meeting with Sechin appealed to Putin in September last
Russian President Vladimir Putin on October 6. year to support the company in obtaining tax
"Unfortunately we are yet to agree on a rea- breaks to make the project commercially feasi-
sonable framework which would ensure a return ble. The Rosneft chief asked for negative excise
on investment with the finance ministry," Sechin duties – effectively subsidies – to be applied on
said "But we have not lost hope; we will continue the naphtha and crude oil feedstock that FEPCO
work." will consume, in order to low production costs.
Under its first phase, priced at RUB700bn At the time it was reported that the govern-
($9.3bn), FEPCO is slated to process up to 12mn ment was reviewing the proposal.
tonnes per year (240,00 barrels per day) of crude The finance ministry reined in tax breaks for
oil and produce 8mn tpy of gasoline, diesel and the Russian oil industry last year, reasoning that
other refined fuels, along with 3.4mn tpy of pet- the country's budget was under strain as a result
rochemicals. Its output would double under of low oil prices and needed extra support. How-
a second stage, which would bring the overall ever, whereas other Russian producers such as
investment cost to RUB1.5 trillion. Lukoil, Gazprom Neft and Tatneft were hit hard
Rosneft has been trying to advance the by the change in fiscal regime, Rosneft came
project for a decade but quietly shelved it in away relatively unscathed. ™
PROJECTS & COMPANIES

Russian phosphate producer PhosAgro plans

small-scale LNG to power facilities

RUSSIA RUSSIAN chemicals group PhosAgro plans to PhosAgro is still studying the economic fea-
build an LNG plant in Russia’s north-west Mur- sibility of the project, and is yet to take a final
The group is also mansk region to supply heat to its production investment decision (FID). Three years ago the
switching its mining complex there, the company reported on Octo- company also partially converted its Rasvum-
equipment to run on ber 4. The group is also switching its mining chorrsky mine to run on LNG. ™
LNG rather than fuel machinery to run on LNG rather than fuel oil.
oil. The RBC newspaper estimates that the com-
pany would need to build a 20,000 tonne per year
LNG plant at a cost of RUB2bn ($27.6mn) in
order to fully cover its needs. Its use would bring
about a 20% drop in CO2 emissions.
Like other energy-intensive industries, Pho-
sAgro, which produces fertilisers and phos-
phates, is under investor pressure to reduce its
emissions. Other players in its field are doing
the same. For example, Morocco’s OCP, the
world’s largest phosphate producer, is consid-
ering switching its mining transport to run on
either hydrogen or electricity. It also wants to use
renewables to power its facilities.

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