Gazprom inks contracts for Russian gas processing projects

June 21, 2021

PJSC Gazprom entered a series of new agreements June 4 related to ongoing development of gas processing projects now under way in Russia (OGJ Online, Mar. 29, 2021; June 10, 2020).

Gazprom and JSC RusGazDobycha 50-50 special-purpose venture RusKhimAlyans let a contract to a consortium of Linde PLC’s Linde Engineering and Rönesans Holding’s Renaissance Heavy Industries (RHI) to deliver engineering, procurement, construction, and commissioning (EPCC) services on the central processing and off-site installations of RusGazDobycha’s planned integrated natural gas processing and liquefaction complex (GPC). The GPC will be built as part of the proposed gas processing, liquefaction, and chemical complex for processing ethane-containing gas (CPECG) on the Gulf of Finland near the seaport of Ust-Luga, Leningrad Oblast, Russia, Gazprom said.

Gazprom, which in May announced initial start of construction works on the broader CPECG project—including RusGazDobycha’s GPC, as well as RusGazDobycha subsidiary Baltic Chemical Complex LLC’s (BCC) planned ethane-cracking, or gas chemical, complex—said the Linde-RHI consortium intends to begin directed construction activities at the GPC by the end of June (OGJ Online, May 24, 2021).

In addition to the EPCC contract, Gazprom confirmed RusKhimAlyans entered an MOU with JSC SOGAZ—Russia’s largest insurer—to establish a strategic partnership under which SOGAZ will prepare proposals to ensure the operator maintains necessary insurance coverage and protection during implementation of the CPECG’s gas chemical complex (GCC) and GPC projects.

Alongside contracts for the CPECG projects, Gazprom also said subsidiary OOO Gazprom Pererabotka Blagoveshchensk (GPB) signed an agreement of cooperation with PJSC Sibur Holding subsidiary Amur GCC LLC outlining basic terms and conditions under which Amur GCC can jointly use infrastructure associated with GPB’s 42-billion cu m/year (bcmy) grassroots Amur gas processing plant (AGPP) now under construction in Svobodny in Russia’s far-east Amur region during construction of Amur GCC’s own nearby Amur gas chemical complex (AGCC), an integrated 1.5 million-tonnes/year (tpy) polyethylene and polypropylene production complex (OGJ Online, May 5, 2020). As part of the agreement, Amur GCC will have access to GPB’s Zeya River wharf, access roads, vehicle ramps, and railway infrastructure.

Gazprom additionally signed a preliminary contract with Caspian Innovation Co. (CIC) for supply pf LPG from subsidiary OOO Gazprom Dobycha Astrakhan’s 12-bcmy Astrakhan GPP in southern Russia’s Astrakhan Oblast to the proposed Astrakhan GCC being jointly developed by Gazprom and CIC. The agreement establishes basic terms and conditions of the pricing mechanism and LPG volumes to be supplied to the Astrakhan GCC over a 20-year period. Gazprom said the preliminary contract follows its November 2020 agreement with CIC to codevelop the planned GCC, which included preliminary terms for supply of ethane from the Astrakhan GPP to the GCC.

Gazprom previously signed a memorandum of cooperation for development of the Astrakhan GCC in 2017, at which time the companies agreed to carry out a feasibility study for the proposed petrochemical complex for manufacturing polymeric products from ethane provided by the Astrakhan GPP following renovations to its low-temperature gas separation units, Gazprom said in release on June 2, 2017. Further details regarding the Astrakhan GCC, however, have yet to be made public.

Gas processing projects

The recent contracts come as part of Gazprom’s accelerated program to monetize its Russian natural gas resources.

RusKhimAlyans’s GPC of the CPECG, which will have 13 million-tonnes/year liquefaction capacity, initially will receive 45 bcmy of wet natural gas feedstock from Gazprom’s Achimov and Valanginian deposits in the Nadym-Pur-Taz region of the Yamal Peninsula. Later supplies will come from specially allocated ethane-rich natural gas pipelines delivering production from the region’s yet-to-be-developed Tambeyskoye field.

The GPC will produce about 3.6 million tpy of ethane and 1.7 million tpy of LPG, with ethane from the complex to feed nearby BCC’s proposed $13-billion ethane cracking project that—once in operation—will produce more than 3 million tpy of polymers (OGJ Online, Nov. 9, 2020). About 18 bcmy of gas remaining after processing at GPC—including ethane extraction, LPG, and 13 million tpy of LNG—will be exported from the site via Gazprom’s gas transmission lines, according to a May 27 Gazprom presentation.

With its first two production trains still on schedule for startup later this year, GPB’s AGPP comes as part of Gazprom’s implementation of its Eastern Gas Program (EGP) to integrate field developments, pipeline, and natural gas production centers in East Siberia and Russia’s Far East. The AGPP, which will process multicomponent gas it receives from EGP’s Irkutsk and Yakutia gas production centers via the Power of Siberia gas pipeline, specifically will support Gazprom’s commitment to supply 38 bcmy of Russian natural gas into China over 30 years (OGJ Online, May 29, 2020).

Alongside producing about 2.4 million tpy of ethane, 1 million tpy of propane, 500,000 tpy of butane, and 200,000 tpy of pentane-hexane fraction, the six-train AGPP also will produce as much as 60 million-cu m/year of helium, using feedstock from Chayandinskoye field. Together with the company’s other reserves in East Siberia, Chayandinskoye forms one of the largest helium reservoirs in the world (OGJ Online, Dec. 19, 2012).

All six production trains of the AGPP are scheduled to be fully operational sometime in 2025, Gazprom said in its May presentation to investors.