On building the Eastern Petrochemical Complex and stabilising petroleum prices in the Far Eastern Federal District
The Government has reported on efforts to fulfil Clause 4 of Presidential Instruction No Pr-967 of April 29, 2013.
The Government, in particular, reports that, in cooperation with the concerned federal executive agencies and the Administration of the Primorye Territory, it has analysed the Rosneft Oil Company’s proposals on building the Eastern Petrochemical Complex, hereinafter referred to as the EPC, near the city of Nakhodka in the Primorye Territory, and stabilising petroleum prices in the Far Eastern Federal District, hereinafter referred to as the FEFD.
The Ministry of Natural Resources and Environment is ready to examine Rosneft proposals on including subsurface sites located along the Eastern Siberia-Pacific Ocean trunk oil pipeline, hereinafter referred to as the ESPO, in the list of subsurface sites that can be allotted for subsequent use. The ministry is prepared to examine these proposals in line with the standard procedure.
The relevant requests for obtaining technical conditions to connect the EPC to the system of Transneft trunk oil pipelines and Gazprom gas pipelines and furthermore to connect the EPC to the general-purpose Russian Railways infrastructure are being coordinated. The pipelines are expected to annually transport 4.3 billion cubic metres of natural gas after the project attains its design capacity.
The technical conditions for connecting the EPC to the power transmission lines of the Federal Grid Company of the Unified Energy System (FSK UES) have been coordinated. Moreover, Rosmorport and Rosneft have agreed to completely coordinate specific parameters for building a sea terminal in March 2014.
Expanded sales using mercantile exchange mechanisms are called on to stabilise petroleum prices. In the first 10 months of 2013, the Komsomolsk-on-Amur Refinery and the Khabarovsk Refinery have sold 98,800 tonnes of petroleum on the St. Petersburg International Mercantile Exchange. This exceeds the January-October 2012 mercantile exchange sales figures ten times over.
In an effort to ensure the economic development of the FEFD, the Government confirms that it is advisable to build the first stage of the EPC, namely, an oil refinery with an annual capacity of 12 million tonnes, provided that Rosneft fulfils the following conditions:
· Finance the EPC construction project without budget allocations;
· Preserve oil quality along other oil transportation directions via the Transneft pipeline system;
· Annually produce at least 1.5 million tonnes of automobile petrol and six million tonnes of diesel fuel from 2021;
· Include Rosneft obligations to deliver the above-mentioned motor fuel to the domestic market of the Russian Federation in the four-sided agreement between the Federal Anti-Monopoly Service, the Federal Service for the Supervision of Environment, Technology, and Nuclear Management (Rostekhnadzor), the Federal Agency on Technical Regulating and Metrology (Rosstandart), and Rosneft.
At the same time, expanded feedstock deliveries to the EPC for subsequent refining should not negatively impact the freight turnover of Far Eastern ports. Furthermore, it would be advisable to discuss the need for building the second stage of the EPC after information about projected petrochemicals sales volumes on the domestic market of the FEFD and on Asia Pacific markets has been specified.