Rosneft and China National Chemical Corporation (ChemChina) have signed an 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 agreement defines the composition of the JV - Rosneft will hold 60 percent, while ChemChina will own 40 percent.
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.
Igor Sechin, Chief Executive Officer, Rosneft, commented, “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”.
In June 2016, Rosneft and ChemChina signed heads of agreement for joint feasibility study in respect of the FEPCO project.
Ren Jianxin, president, ChemChina said, “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.”
Rosneft and ChemChina have a successful record of mutually beneficial cooperation. In June, 2015, two companies 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 FEPCO construction project provides for a modern petrochemical complex in the Far East which will enable Rosneft 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; and generate additional profits by selling to the Asia-Pacific.
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