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Sinopec signs agreement to take stake in Amur petchems project in Russia
06 June 2019
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Sibur and Sinopec today signed a number of agreements that
include Sinopec's possible participation in Sibur's previously
announced mega Amur gas chemicals complex (AGCC) in Russia's Far
East. Subject to Sibur's final investment decision, Sinopec is
expected to hold a 40% share in the joint venture (JV). Dmitry
Konov, chairman of Sibur's board and Dai Houliang, chairman of
Sinopec, signed the agreement in the presence of Xi Jinping,
president of China, and Vladimir Putin, president of the Russian
Federation. AGCC is planned to be built at Blagoveshchensk, near
the Chinese border, where Gazprom is installing infrastructure to
supply natural gas to China. As part of its investment, Gazprom is
building six gas-processing lines to produce mostly liquid
hydrocarbons and helium and will supply ethane feedstock to AGCC.
"… AGCC is another profound … cooperation [between the companies]
since Sinopec became a strategic investor in Sibur Holding …. We
expect to build the project and make it a model for the extension
of the bilateral cooperation from upstream to the petrochemical
sector," Dai Houliang said. The two companies also signed a broader
agreement of cooperation setting out details of their strategic
partnership in China, Russia, and other countries, which also
covers joint projects. Under the deal, Sibur and Sinopec have
agreed to join forces to process natural gas into petrochemicals in
Russia and China, and to engage in R&D and personnel training.
Sibur International, the company's export division, and Sinopec
Chemical Commercial Holding (Hong Kong) have signed a distribution
agreement to supply polyethylene to China from Sibur's $9.5 billion
ZapSibNeftekhim project at Tobolsk, Russia construction of which is
nearing completion. Sinopec and the Silk Road Fund each control 10%
of Sibur while Russian gas tycoon Leonid Mikhelson is the single
largest shareholder with a 48.5% stake. Business partner Gennady
Timchenko has a 17% stake, and the rest is held by Sibur's
management. A separate deal was signed today by Sibur and the Silk
Road Fund. Under the agreement, the parties will look at investment
opportunities to develop relations between Northeast China and
Russia's Far East.