PRESS: Gazprom mulls $14 bln gas chemical complex on Yamal

MOSCOW, Mar 2 (PRIME) -- Russian gas giant Gazprom is currently appraising construction of polyethylene production on the base of the Bovanenkovsky cluster of fields on the Yamal Peninsula, business daily Vedomosti reported Monday citing documents of the Russian Direct Investment Fund (RDIF).

The cost is preliminarily estimated at U.S. $14.1 billion. At the end of 2019, the project was discussed with Saudi Arabia’s SABIC and Azerbaijan’s SOCAR, sources said.

The project encompasses construction of two large plants – gas processing and gas chemical. The gas processing facility with a capacity of 40 billion cubic meters of gas is estimated at $4.3 billion, while the gas chemical facility with a capacity of 2.1 million tonnes of polyethylene at $9.8 billion. The figures were calculated based on a similar complex with a smaller capacity that SOCAR and Germany’s Linde AG plan to build near Baku, Vedomosti said referring to the RDIF’s documents.

The bulk of investments of $9.9 billion is expected to be attracted in the form of debt financing, while the remaining funds will be covered by investors, the daily said.

“The moment of making an investment decision is not yet close, but the project has been worked out in detail, and the chances of its implementation are high,” a federal government official told the daily.

A representative of the RDIF said the fund believes the oil and gas chemical direction is promising for investments and is considering several projects in this sphere, but declined to comment on certain projects. Gazprom, SABIC, and SOCAR did not comment.

The Bovanenkovsky cluster comprises the Bovanenkovskoye, Kharasaveiskoye, and Kruzenshternskoye fields.

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