OREANDA-NEWS. NOVATEK and SIBUR reported to Russia's President Vladimir Putin on completion of a series of projects aimed at creating an integrated technological chain from hydrocarbon production to deep processing in Russia. The announcement was made at a meeting of the Presidential Commission for Strategic Development of the Fuel and Energy Sector and Environmental Security held in Astrakhan.

During the teleconference held in the town of Purovsk (Yamal-Nenets Autonomous Region), NOVATEK announced the expansion of its Purovsky Gas Condensate Processing Plant's (“Pursovky Plant”) capacity from five (5) to 11 million tons per annum (“mtpa”) providing for the additional volumes of natural gas feedstock for gas processing and petrochemical production. This discussion was followed by a teleconference from Tobolsk, where Mikhail Karisalov, SIBUR's Executive Director, informed Russia's President Vladimir Putin that a new raw NGL (“natural gas liquids”) pipeline between the Purovsky Plant and the Tobolsk production site had commenced testing operations and had already transferred first volumes of raw NGL from the Purovsky Plant to the expanded gas fractionation capacities at Tobolsk-Neftekhim.

SIBUR has completed the construction of the raw NGL pipeline from the Purovsky Plant to Tobolsk-Neftekhim with a length of over 1,100 kilometers (“km”) length. As of today, the pipeline sections from the Purovsky Plant - Noyabrsk loading rack and the Noyabrsk rack - Yuzhno-Balyksk Main Pumping Station (“MPS”) with combined length of 686 km have been put into commercial operation and filled with raw NGL. The pipeline section from Yuzhno-Balyksk MPS to Tobolsk-Neftekhim with a length of 414 km is being commissioned; the installation of power lines, automated control systems, communication equipment, as well as the construction of access roads is currently in progress. The raw NGL separated from the Purovsky Plant is supplied to the gas fractionation capacities of SIBUR in Tobolsk using existing pipelines.

Throughput capacity of the Purovsky Plant - Noyabrsk loading rack pipeline section is up to 4.5 mtpa of raw NGL per annum, of which the Noyabrsk loading rack - Yuzhno-Balyksk MPS section is up to 5.5 mtpa, and the Yuzhno-Balyksk MPS to Tobolsk-Neftekhim section is up to eight (8) mtpa.

The final completion and commercial launch of the entire pipeline network is scheduled for 2015. With the new pipeline, SIBUR will substantially expand its light hydrocarbon feedstock transportation infrastructure, increase throughput capacity as well as enhance the reliability of the transport infrastructure. SIBUR's total investments in the pipeline construction project amount to approximately RR63 billion.

As part of expanding the Tobolsk-Neftekhim's gas fractionation capacities, SIBUR has increased the site's capacity from 2.5 mtpa in 2007 to 3.8 mtpa in 2011. With the launch of the second gas fractionation unit, SIBUR can now process up to 6.6 mtpa of raw NGL at the Tobolsk production site. The expansion makes the Tobolsk production site one of the largest gas fractionation capacities worldwide. SIBUR's investment in the second phase of construction of the gas fractionation capacities, including storage facilities, totalled approximately RR14 billion. The project on increasing the processing capacities in Tobolsk is implemented with support of the Government of Tyumen Region.

According to Leonid Mikhelson: “The partnership between NOVATEK and SIBUR has successfully integrated the development of new gas fields and NGLs production from gas condensate with the construction of raw NGL pipeline infrastructure and capacities for deeper processing of hydrocarbon feedstock. For SIBUR, this is a key project ensuring stable and guaranteed access to feedstock in Western Siberia and opening up opportunities for future investment projects in petrochemicals.”