Gazprom Neft and Sibur begin construction of new gas processing plant in Khanty-Mansi Autonomous Okrug

Press-release

Gazprom Neft and Sibur have signed an agreement for the construction of a new gas processing plant capable of processing 900 million cubic meters of associated gas per year at the site of the Yuzhno-Priobskaya Compressor Station in Khanty-Mansi Autonomous Okrug.

The recovery factor of target components at the gas processing plant will be at least 95 percent, which is in line with levels achieved internationally.

OOO Yuzhno-Priobsky Gas Processing Plant, a joint venture between Gazprom Neft and Sibur established on a parity basis, is the owner of the Yuzhno-Priobskaya Compressor Station and will carry out the project. According to a memorandum, Gazprom Neft will supply associated gas to the Yuzhno-Priobskaya Compressor Station on a long-term basis, while Sibur will acquire half of the volume supplied. The companies plan to process associated gas and obtain a finished product in proportion to their respective shares in the joint venture. Sibur will sell its share of the dry stripped gas to Gazprom Neft and purchase from Gazprom Neft that company’s share of the natural gas liquids produced. All of the contracts will be long-term in scope and will rely on agreed price formulas.

The plan is to export the dry stripped gas via the Khanty-Mansi City Gas Supply trunk pipeline. Natural gas liquids are to be exported via a products pipeline to Sibur’s industrial site in Tobolsk. The project for construction of the gas processing plant involves creating infrastructure for the loading, storage, and unloading of natural gas liquids, as well as renovating the pipeline for transport of the dry stripped gas to the gas trunk pipeline.

The decision was made in 2010 to build a compressor station and an associated gas collection system at Yuzhno-Priobskoye field that would make it possible to deliver gas to the Yuzhno-Balyksky Gas Processing Complex. Gazprom Neft has also built a 90-kilometer-long associated gas collection system and five vacuum compressor stations for the purpose of shipping gas from the field to the compressor station. The compressor station, which has a design capacity of 500 million cubic meters per year and was built within the framework of the joint venture, accepted its first associated gas for pre-commissioning in the summer of 2013. However, increased estimates of associated gas to be produced at Gazprom Neft fields made it possible to make the decision to create the new Yuzhno-Priobsky Gas Processing Plant at the site of the compressor station.

“Raising the efficiency of associated gas utilization is one of the key tasks which Gazprom Neft approaches with special attention. We are predicting further growth in the volumes of associated gas produced at our fields in Khanty-Mansi Autonomous Okrug, and are beginning a new project aimed at increasing the volumes of associated gas utilized. It became the optimal solution to build a gas processing plant, since that will allow us and our partners to obtain a maximum economic effect from the processing of raw materials and use our companies’ work experience on industry markets,” commented Gazprom Neft First Deputy CEO Vadim Yakovlev.

“In partnership with oil-producing companies, we are continuing to grow our feedstock and develop gas processing facilities and infrastructure in Western Siberia. By uniting Sibur’s competence in the field of constructing and operating gas processing plants with Gazprom Neft’s raw materials potential, we are getting the opportunity to form a project that will be effective for each of its participants,” stated Sibur Executive Director Mikhail Karisalov.