Sinopec Cleared to Invest in Russian Gas Chemicals Venture

Chinese state oil company Sinopec has secured the approval of Russia's special committee on foreign investment to acquire a 40% interest in a planned gas chemicals complex in the Russian Far East, the Russian government said on December 15.

The project in the Amur region bordering China is led by Russian petrochemicals group Sibur and is expected to produce 2.3mn metric tons/year of polyethylene and 400,000 mt/yr of polypropylene. Its feedstock will be some 3.5mn mt/yr of ethane and LPG feedstock supplied from Gazprom's Amur gas processing plant, due to begin treating Russian gas on route to China via the Power of Siberia pipeline in 2023.

A final investment decision on construction is yet to be taken.

Sinopec has been in talks on partnering with Sibur at the project for five years, ever since it acquired a 10% stake in the Russian firm for $1.3bn. The Amur plant will primarily serve the Chinese market and other customers in the Asia-Pacific region, as demand for petrochemicals in the Russian Far East is limited.