Rosneft and ChemChina Signed an Agreement Setting out the Framework for Further Implementation of the FEPCO project
Rosneft and China National Chemical Corporation (ChemChina) signed on the sidelines of the negotiations between the President of the Russian Federation Vladimir Putin and the President of the People's Republic of China Xi Jinping the Agreement setting out the framework for further implementation of the Far-Eastern petrochemical company (FEPCO) project and the establishment of a joint venture (JV). The document was signed by Rosneft Chief Executive Officer Igor Sechin and ChemChina President Ren Jianxin.
The agreement confirms the intent of the parties to further implement the FEPCO project and create a JV. The document defines the composition of the JV – Rosneft will hold 60%, whilst ChemChina will obtain 40%. The financial and operational structure of the JV will be defined by the parties within further negotiations.
The signed document also specifies the timetable for Front End Engineering and Design (FEED) and start of site infrastructure preparation, outlines the milestones in project execution, and on a broader basis confirms the project roadmap for FEPCO project delivery.
Commenting on the signed document, Igor Sechin said: “This agreement with ChemChina is a clear reflection of the scale of cooperation between the leaders of the Russian and Chinese energy industry. The FEPCO project marks a new level of energy related partnership between the countries and it will further strengthen the economic ties between Russia and China. The formation of the JV will allow us to efficiently structure the development of one of the most promising petrochemical projects in the world with direct access to the Asian-Pacific market. Together with our Chinese partners we will enable FEPCO products to obtain significant marketing potential in a highly competitive region”.
ChemChina President Ren Jianxin said: “Rosneft is an important partner of ChemChina. We keep a good track record of comprehensive cooperation. The signed agreement is of great significance for both parties to further implement the FEPCO project and deepen comprehensive cooperation. FEPCO project is positioned to provide high value-added chemical products covering Asian-Pacific markets. It will also strongly facilitate the development of infrastructure in Far East region.
Note for editors:
In June, 2016 Rosneft ChemChina have signed Heads of Agreement for joint feasibility study in respect of the FEPCO project.
The agreement provides for the entry of ChemChina into the FEPCO equity capital with a stake of 40% and for the proportional financing.
The Companies have a successful record of mutually beneficial cooperation. In June, 2015 Rosneft and ChemChina signed a contract for crude supplies to the Chinese company. The parties aim to expand the partnership in this area.
In October, 2015, Rosneft, Pirelli and Synthos signed a Memorandum of Understanding aimed to approve the preliminary feasibility study results and continue to implement the cooperation project to build a plant producing synthetic rubber in Nakhodka within the petrochemical cluster of the FEPCO project. The document points out the completion of the pre-feasibility study development phase of the plant that is going to produce synthetic rubber in Nakhodka, including the process configuration options for the plant specifications, market research, evaluation of investment and operating costs.
The FEPCO construction project provides for a modern petrochemical complex in the Far East which will enable us to: lay the foundation for the development of a petrochemical cluster; develop the infrastructure and related production in the Far East Federal District; substitute exported feedstock for high value added products; generate additional profits by selling to the Asia-Pacific; create new jobs in the region.
Rosneft Information Division
Tel.: + 7 (499) 517-88-97
September 4, 2016
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