Rosneft invests $14.9 billion in Far East FEPCO project
The Russian giant Rosneft, 69.50% owned by the State and 19.75% by the UK major BP, has confirmed to move forward on the Nakhodka integrated refinery and petrochemical complex close to Vladivostok in the south end of Russia Far East.
After establishing the ZAO Vostochnaya Neftechemicheskaya (VNHK) company, Rosneft rebranded its subsidiary into Far East Petrochemical Company (FEPCO) in order to attract foreign investors to take shares in the project.
Being directly concerned about these sanctions, Rosneft negotiated with the Russian Government a $40 billion back up in order to compensate the effects of these sanctions and maintain its expansion program.
From its conceptual study, the Nakhodka Petrochemical Refinery should require $37 billion capital expenditure as Rosneft is targeting to monetize its nearly unlimited crude oil resources into valuable hydrocarbons products with its rich neighboring countries China, South Korea and Japan.
But Igor Sechin, Rosneft CEO, announced to build the first refining line to supply the Nakhodka Petrochemical complex with a capacity of 12 million tonnes per year (t/y), equivalent to 240,000 barrels per day (b/d).
In order to supply Rosneft Far East Petrochemical project, Transneft will increase the capacity of its Eastern Siberia – Pacific Ocean Pipeline (ESPO) from the current 30 million t/y to 90 million t/y.
Rosneft and Mitsui signed Far East Petrochemical MOU
– 1.4 million t/y of ethylene
– 0.6 million t/y of propylene
– Innovene PP for the production of Polypropylene
– Innovene S for the production of mono and bimodal high density polyethylene (HDPE)
– Innovene G to swing gas into linear low density polyethylene (LLDPE) and HDPE.
In addition to the refinery and the Petrochemical complex, the Far East project will include a marine terminal to store and offload hydrocarbons products on vessels in the ice-free port of Nakhodka.