OREANDA-NEWS. March 30, 2010. SIBUR has applied for participation in the tender of investment projects aimed at reduction of greenhouse emissions. The Russian operator of ERU (emission reduction units) responsible for the tender arrangement is Sberbank of the Russian Federation.

SIBUR’s submission was made jointly with investment bank J.P. Morgan acting as a buyer of ERU in pursuance of the Kyoto Protocol. Implementation of projects participating in the tender will result in additional processing of up to 2 billion cubic meters of associated gas and reduction of greenhouse emission through the years 2010-2011 more than by 9 million tons of CO2 equivalent.

Proceeds from sales of ERU will be used in financing of investment projects connected with deep processing of associated gas that is currently burnt in field flare units of oil and gas deposits.

SIBUR consistently pursues the strategy of increased intake of associated gas. During the period from 2007 to 2009, processing of this gas has increased from 13.0 to 16.8 billion cubic meters p.a. and is going to achieve 20 billion cubic meters p.a. in the next few years.

For Editors

Implementation of Kyoto Protocol to the UN Framework Convention of Climate Change provides for sale by Russian companies to foreign entities of greenhouse emission reduction units agreed during realization of the investments projects.

In October of 2009, the RF Government has approved the “Regulation on Implementation of Kyoto Protocol (Article 6) to the UN Framework Convention of Climate Change” by which the RF Sberbank was appointed an operator of ERU in Russia. As such, Sberbank is responsible for arrangement of tenders and examination of incoming applications. Approval of the projects upon examination of applications falls within competency of the RF Ministry of Economic Development.

Further a project approved by the Ministry becomes subject to monitoring by independent accredited institutions to confirm the amount of reduction units over the specified period. Then Sberbank will credit the relevant amount of carbon units to the project company’s account following which that company becomes entitled to funds receivable through the bank from buyers of ERU under the ERU sale contract (ERPA - Emission Reductions Purchase Agreement).