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Rosneft in progress on Nakhodka Petrochemical Refinery complex

Rosneft invests $14.9 billion in Far East FEPCO project

2B1st_Project_Smart_Explorer_Sales_Pursuit_ToolThe 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.

Since 2010, Rosneft is working on developing a giant downstream project at Pervostroiteley near Nakhodka in the Primorsky region.

Rosneft_Mitsui_FEPCO_Petrochemical_Project_mapAfter 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.

Rosneft announcement to move forward on its Far East Petrochemical complex takes place in a context of political tensions and economical sanctions from the Western countries to Russia.

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

Because of the size of the project, Rosneft will develop it in phases where it will invest $14.9 billion for the Far East Petrochemical project phase-1.

Rosneft-Mitsui_Russia_Nakhodka_Petrochemical_Complex_MapOriginally the Nakhodka Petrochemical complex was due to receive naphtha from existing Rosneft refineries in Achinsk and Komsomolsk.

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

With Nakhodka Phase-1, the refinery should supply 3.4 million t/y of naphtha as feedstock for the petrochemical  complex.

In May 2013, Rosneft and Mitsui & Co. Ltd (Mitsui) signed a memorandum of understanding (MOU) to develop jointly the Nakhodka Petrochemical Complex.

At this stage the Rosneft Far East cracker is designed to produce:

Rosneft_Ineos_Far-East-Petrochemical-Project – 1.4 million t/y of ethylene

 – 0.6 million t/y of propylene

Then Rosneft and Ineos Technologies (Ineos) signed an agreement to licence:

 – 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.

Despite delays in this gigantic Far East Petrochemical project, Rosneft and Mitsui are expecting to start the first shipments from Nakhodka by 2018.

For more information about oil and gas and petrochemical projects go to Project Smart Explorer


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