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US tech firms to support Russia’s Baltic chemical hub
PROJECTS & COMPANIES
A pair of US tech firms have been hired to pro- vide technology for a new gas chemical complex in north-west Russia.
Private Russian developer RusGazDobycha intends to construct a plant in the Baltic port of Ust-Luga capable of producing 3mn tonnes per year (tpy) of ethylene and polyethylene. It is due to start production in 2023 and reach full capac- ity within two years.
RusGazDobycha announced on November 1 it had struck a deal to license ethylene produc- tion and separation technology from Lummus Technology, a subsidiary of Texas-based McDer- mott International. McDermott, which is strug- gling with debt having posted four consecutive quarterly losses, is currently seeking a buyer for Lummus.
Another US firm, Univation Technologies, has also agreed to license out its polyethylene technology, RusGazDobycha said.
The gas chemical plant will source its ethane feedstock from a gas processing and liquefaction complex RusGazDobycha is implementing with state-owned Gazprom. The latter project, which will process up to 45bn cubic metres of gas and produce 13mn tonnes of LNG, 4mn tonnes of ethane and more than 2.2mn tonnes of LPG annually, is also anticipated to come online in 2023.
The cost of the chemical project has not been disclosed. But RusGazDobycha has valued a front-end engineering design (FEED) and engi- neering, procurement and construction (EPC) contract it recently awarded to China National
Chemical Engineering for its development at €12bn ($13.2bn).
RusGazDobycha and Gazprom also need to obtain technology for the $11bn processing and liquefaction plant. Royal Dutch Shell was pre- viously expected to serve as a tech partner, but withdrew from the venture in April after Gaz- prom made changes to its scope and brought on board RusGazDobycha, a company linked with sanctioned Kremlin ally Arkady Rotenberg. Germany’s Linde could replace the Anglo-Dutch major, having signed a joint venture deal with Gazprom in October to design processing and liquefaction facilities.
Separately, Russian development bank Vne-
shEkonomBank (VEB.RF) has announced that it need to obtain
is opening a credit line for the complex, without disclosing the amount of the financing.
technology for the $11bn processing and liquefaction
VEB was previously granted RUB200bn
($3.1bn) of federal budget funds as a five-year
deposit from the Finance Ministry, which was
likely destined for the support for Ust-Luga
complex. plant.
The government and the VEB previously backed the idea of supporting the project.
Gazprom has previously said that at least RUB700bn-900bn ($11-14bn) of investment was needed in Ust-Luga, while other official statements limited VEB’s potential partici- pation in the project at RUB111bn ($1.7bn). Russian Minister of Finance Anton Siluanov also previously argued that Ust-Luga was worth the investment from the National Wel- fare Fund.™
RusGazDobycha and Gazprom also
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w w w . N E W S B A S E . c o m Week 44 07•November•2019