Gas processing and chemical cluster near Ust-Luga presented at St. Petersburg International Economic Forum

The project for a large-scale industrial cluster to be created in the northwest of Russia in 2019–2024 was presented today at the St. Petersburg International Economic Forum 2019.

The event was attended by Alexey Miller, Chairman of the Gazprom Management Committee, Konstantin Makhov, Chief Executive Officer of RusGazDobycha, Kirill Seleznev, Director General of RusKhimAlyans, Andrey Ivanov, Deputy Minister of Finance of the Russian Federation, Igor Shuvalov, Chairman of the State Development Corporation VEB.RF, and Andrey Kostin, President and Chairman of VTB Bank Management Board.

The project envisages the creation of an integrated complex for natural gas processing and liquefaction near the seaport of Ust-Luga, Leningrad Region. The complex will be processing ethane-containing gas, which will be supplied via allocated gas pipelines from Gazprom’s deposits in the Nadym-Pur-Taz region. The operator of the complex is RusKhimAlyans, a special-purpose company owned on a parity basis by Gazprom and RusGazDobycha. A gas chemical facility technologically interconnected with the complex will be constructed by RusGazDobycha.

Every year, the complex will process 45 billion cubic meters of gas and produce around 13 million tons of liquefied natural gas (LNG), up to 3.8 million tons of ethane fraction, up to 2.4 million tons of liquefied petroleum gases (LPG), and 0.2 million tons of pentane-hexane fraction. The gas remaining after the processing (about 19 billion cubic meters) will go into Gazprom’s gas transmission system. The ethane produced by the complex will be processed by the abovementioned gas chemical facility with an output of up to 3 million tons of various polyethylene grades. The commissioning of the facilities will be synchronized: the first trains will come onstream in the fourth quarter of 2023, and the second trains will become operational in the fourth quarter of 2024.

The vertical integration of the capacities for production, transmission and processing of hydrocarbons, coupled with the creation of a single site for ethane production and natural gas liquefaction, will substantially improve the economics and specific indicators of the complex, as well as considerably mitigate resource and price risks. With the gas chemical facility in place, the unique industrial cluster in northwestern Russia will become the only industrial complex of its kind in the world.

Implementation of these projects will significantly contribute to Russia’s social and economic development. The facilities will help increase Russian LNG and LPG exports, as well as boost the production of ethane, which is in high demand by the industry, and high-value-added products of gas chemistry.