On the fringes of the Eastern Economic Forum, RUSHIM, the Ministry for Development of the Russian Far East, VEB.RF, Gazprombank and VTB Bank executed an agreement for cooperation on arranging funding for their gas chemical complex in the Nenets Autonomous Area of the Russian Arctic Zone.

The Agreement was signed by the project shareholder and initiator Mr. Vitaly Yuzhilin, Minister of Development of the Russian Far East Mr. Alexey Chekunov, Deputy Chairman of Gazprombank Board Mr. Alexey Belous, Deputy Chairman and Board Director of VEB.RF Mr. Artyom Dovlatov, and Senior Vice-president of VTB Mr. Vitaly Sergeichuk.

The project provides for development of gas-condensate fields in the Nenets Autonomous Area, construction of the methanol plant with the capacity of 1,800 Ktpa based on the advanced processing equipment supplied by Franco-German company Air Liquide, a port terminal with access to the Northern Sea Route and various infrastructure facilities. Methanol will be produced from natural gas supplied from the Kumzhinsky and Korovinsky gas-condensate fields. The Strategy for Development of the Arctic Zone of the Russian Federation 2035 emphasized the importance of these fields for the energy balance of Russia.

The total estimated cost of the project including the fields development amounts to 205 bln. rubles. The project is planned to be financed within the framework of the Project Financing Factory Program implemented by VEB.RF, the Russia’s national economic development institution.
Mr. Vitaly Yuzhilin, the project shareholder and initiator, said:

“Development of the Russian Arctic Zone is one of the top priorities of the Russian Federation. The project implemented by RusHim Group enables not only to commence development of the gas-condensate fields in the Arctic that have been held in reserve for more than 40 years, but establish the deep-water Indiga Seaport. An important aspect of the project is that it is focused on a high-performance natural gas processing methods and enhancement of non-resource and non-energy-based product exports. Additionally, the Nenets Autonomous Area will receive a substantial number of new jobs including vacancies for highly qualified specialists. Implementation of such a large-scale, complex and important project would be difficult without the support of the financial institutions and the state. In this regard, we would like to thank the syndicate participants for their active interest and work on the project. Also, we are grateful to the Ministry for Development of the Russian Far East for ensuring a favorable investment environment to facilitate implementation of complex and important projects in our Arctic Zone”.

“We are happy to participate in a milestone gas chemical project which importance is highly valuable for the development of the Arctic Zone in general. Methanol production is one of the fastest growing industries capable of diversifying the Russian economy, and Gazprombank has quite a few such projects in its portfolio. Vertical integration, implementation of advanced technologies, and availability of RusHim’s own infrastructure are its key competitive advantages," noted Mr. Alexey Belous, Deputy Chairman of Gazprombank Board.

“Large-scale projects for development of the Arctic Zone are continuously monitored by the Russian Federation. VEB.RF's comprehensive approach to developing the potential of gas chemical projects will make it possible to double polyethylene and LNG output by 2030 through funded projects, and to double methanol production through RusHim project. The contribution of these projects to achieving the goals of the industry strategy aimed at increasing the output by 2030 will be about 70% methanol, 45% LNG and about 30% polyethylene and carbamide. The project implementation will give an additional boost to development of the Arctic gas processing facilities and create new jobs in the Nenets Autonomous Area“, said Mr. Artyom Dovlatov, Deputy Chairman and Board Director of VEB.RF. “Advanced processing of gas with methanol production is not only one of the most promising areas for increasing Russian exports but a transition to a pollution-safer fuel. It is forecasted that development of other Russian projects for methanol plants construction in combination with the implementation of this gas chemical complex, will enable Russia to double its methanol exports reaching 8 mln. tones. A highly professional level of VTB’s expertise for supporting such projects enables development of the most optimal economic solutions that create new potential for development of individual cities and entire regions. One of VTB’s key priorities is to ensure preservation of vulnerable Arctic nature. Therefore, we anticipate implementation of the most advanced technologies,” emphasized Mr. Vitaly Sergeichuk, Senior Vice-president of VTB.
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