Rosneft and China Petrochemical Corporation (Sinopec Group) signed within the the Eastern Economic Forum a binding Agreement on a joint preliminary study of the project for construction and operation of a gas processing and petrochemical complex in East Siberia. The document was signed by Rosneft Chief Executive Officer Igor Sechin and China Petrochemical Corporation (Sinopec Group) Chairman Wang Yupu.

The document signed further to the Memorandum of Understanding and the Framework Agreement, envisages activities to analyze and select a technology to produce high-tech polymers from raw natural gas and its components. The Parties intend to form a joint Project Team to review various applications of state-of-the-art gas processing technologies and to select a project management consultant among global engineering companies. Furthermore, at this stage it is planned to select a site in the vicinity of the Boguchany administrative center (Krasnoyarsk region) to locate the Complex, identify the project configuration and to approve optimal process solutions. In case of a successful completion of the Agreement activities, Rosneft and Sinopec will set up a joint venture to conduct FEED study, construct and operate the Complex.

Implementation of the project will make it possible to supply the growing market for polyethylene and polypropylene in Russia and China. The annual throughput of the Complex Train 1 is expected at 5 bcm of natural gas with the yield of up to 3 Mt of high-tech polymers and petrochemical products for sales primarily on Russian and Chinese markets. The project resource base comprises Rosneft oil and gas fields of the Yurubcheno-Takhomsky cluster in East Siberia.

Commenting on the Agreement signed, Rosneft CEO Igor Sechin said: "The Agreement with Sinopec is a bold example of Company's integral approach. We work with our Chinese partners throughout the entire production chain: we engage them to develop and finance our most promising Greenfield assets in East Siberia, set up high-tech feed processing joint ventures in the RF and agree upon conditions for monetizing gas products and petrochemicals".

After the signing ceremony Wang Yupu said: “The signing of this Agreement will further strengthen and develop the multidimensional cooperation between the parties. This project will allow China to diversify the supplies of petrochemical feedstock, and boost Sinopec’s domestic petrochemical products’ market share. Equally the potential involvement in the project of Chinese petrochemical equipment producers will allow them to expand the geography reach and boost the position in the global arena”.

About Sinopec

China Petrochemical Corporation (Sinopec Group) is a super-large petroleum and petrochemical enterprise group established in July 1998 on the basis of the former China Petrochemical Corporation. Sinopec Group is a state-owned company solely invested by the State, functioning as a state-authorized investment organization in which the state holds the controlling share.

About Rosneft

Rosneft is the leader of Russia’s petroleum industry and the world’s largest public oil and gas
company by liquid hydrocarbon production and reserves. The Company’s core operations are in hydrocarbon exploration and appraisal, production of oil, gas and gas condensate, offshore developments, refining, marketing of oil, gas and oil products inside and outside Russia, and investment activity.

Rosneft’s exploration and production geography spans across all key oil and gas provinces in Russia, namely Western Siberia, Southern and Central Russia, Timano-Pechora, Eastern Siberia and the Far East. The Company also implements projects in Kazakhstan, Algeria, Venezuela, Brazil, Vietnam, the UAE, Canada, and in the Gulf of Mexico. Offshore projects, including in the Arctic, take a special place in Rosneft’s portfolio. Rosneft has joined forces with ExxonMobil, Eni and Statoil to develop Russia’s offshore resources.