TNK-BP pacts with SIBUR involve project blocked by BP

By OGJ editors

Strengthening of a partnership between TNK-BP and a major Russian petrochemical group involves a project contested by breakaway partner BP PLC.

Before TNK-BP announced agreements with the petrochemical group, SIBUR, to cooperate on production, processing, and use of natural gas and gas liquids, directors from BP blocked a plan to expand production from two gas-condensate fields operated by subsidiary Rospan International in Russia’s Tyumen region, according to the Russian operating company.

BP is negotiating with its 50-50 partner in TNK-BP, Alfa Access Renova (AAR), on sale of all or part of its interest (OGJ Online, July 19, 2012). After a series of disagreements, some involving executive succession, AAR has called parity ownership “inoperable.”

New agreements

The agreements between TNK-BP and SIBUR expand a joint venture formed by the firms in 2007 called Yugragaspererabotka, which will be extended through 2026.

They provide for the acquisition by SIBUR of a 25% interest in the Zaykinsky Gas Processing Plant in the Orenburg region in 2013, when TNK-BP will complete a upgrade doubling capacity to 2.2 billion cu m/year (cmy).

The companies will jointly manage the upgraded plant and related facilities as a standalone joint venture.

As part of the agreements, TNK-BP and SIBUR are discussing purchase by SIBUR of a propane-butane mix that would be produced by a condensate-stabilization unit TNK-BP plans to build at Vostochno-Urengoisky field, one of Rospan International’s gas-condensate fields in the Yamalo-Netes Autonomous District. The other field is Novo-Urengoisky.

Polymer project

SIBUR plans to transport the mix to Tobolsk for further fractionation and use as petrochemical feedstock. At Tobolsk, the company is increasing gas fractionation capacity to more than 6.5 million tonnes/year (tpy) from 3.5 million tpy and building 500,000 tpy of polypropylene capacity.

The Rospan fields currently are in a pilot development phase, producing about 3.5 billion cmy of gas and 600,000 tpy of condensate.

The project opposed by TNK-BP’s BP directors is the first phase of full-field development of the fields, which is to boost gas production to 8.6 billion cmy. The second phase would push production to 16.2 billion cmy.

Rospan International estimates reserves at the field of 891 billion cu m of gas and 133 million tonnes of condensate in the deep Lower Cretaceous Valanginian and Achimov formations.

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