Chinese Firm Hired for Baltic Chem Project

A Chinese firm has been hired to design and build a major gas-based petrochemical hub on Russia’s Baltic Sea shore.

China National Chemical Engineering said on October 12 it had secured a front-end engineering design and engineering procurement and construction contract valued at €12bn ($13.2bn) from private Russian developer RusGazDobycha. Construction will take five years, it said.

RusGazDobycha’s Baltic chemical complex is set to produce 3mn mt of polymers each year. It will run on the 4mn mt/yr of ethane feedstock supplied from a nearby integrated gas processing and liquefaction complex that RusGazDobycha is developing with state-owned Gazprom in the port of Ust-Luga. The latter facility is due to start up in 2023.

In addition to ethane, Gazprom and RusGazDobycha’s complex will also produce 13mn mt/yr of LNG, 2.2mn mt/yr of liquefied petroleum gas and 20bn m³/yr of treated natural gas for export. Shell had been involved in the project, but exited in April after Gazprom changed its scope from an LNG-only to an integrated gas and petrochemicals complex. RusGazDobycha has links with sanctioned Kremlin ally Arkady Rotenberg.

Gazprom recently struck a joint-venture deal with Germany’s Linde to obtain liquefaction technology, presumably for use at the Baltic project, having earlier planned to rely on Shell’s technology.