Vladivostok, September 3, 2021 – At the Eastern Economic Forum 2021, Gazprombank, VEB.RF, VTB Bank and RusKhim Gaz LLC signed an agreement on the organization of cooperation aimed at the financing of a new gas chemical project in the Nenets Autonomous Area, within the Arctic Zone of the Russian Federation.
The document was signed by Alexey Belous – Deputy Chairman of the Management Board at Gazprombank, Artem Dovlatov – Deputy Chairman and Member of the Management Board at VEB.RF, Vitaly Sergeychuk – Senior VP of VTB Bank, Alexey Chekunkov – RF Minister for the Development of the Russian Far East and Arctic, and Vitaly Yuzhilin – shareholder and initiator of the project.
The project encompasses the development of gas condensate fields in the Nenets Autonomous Area, the construction of a plant for the production of methanol with an annual output capacity of 1,800K tons based on cutting-edge process equipment to be supplied by the French-German company AirLiquide, a port terminal near the Town of Indiga with access to the Northern Sea Route, and other infrastructure. The raw material for the production of methanol will be natural gas from the Kumzhinskoye and Korovinskoye gas condensate fields, the importance of whose inclusion in Russia’s energy mix is highlighted in the Development Strategy for the RF Arctic Zone through 2035.
The project’s total cost is estimated at RUB 205 bln (including development of the respective fields). The project is expected to be financed, among other ways, within the framework of the “Project Finance Factory” program, operated by VEB.RF.
“We’re pleased to become a participant in this landmark gas chemical project, which is of great importance to the development of the region and the Arctic Zone as a whole. Methanol production is one of the most dynamically-developing industrial sectors capable of diversifying the Russian economy, and Gazprombank’s portfolio is already bursting with such projects. Vertical integration, the use of cutting-edge technologies and existing in-house infrastructure are the key competitive advantages of RusKhim,” noted Alexey Belous, Deputy Chairman of the Management Board at Gazprombank.
“Sweeping projects aimed at the development of the Arctic is a constant focus of the Russian Federation. The comprehensive approach taken by VEB.RF towards unlocking the potential of projects in the gas chemical complex will make it possible, thanks to the projects we’re helping to finance, to double the production of polyethylene and LNG, and factoring in the RusKhim project – to double methanol production as well, by 2030. The contribution of these projects to achieving the targets of the industry’s strategy for ramping up production volumes by 2030 is roughly 70% for methanol, 45% for LNG and approximately 30% for polyethylene and carbamide. Implementation of this project will lend added impetus to the development of Arctic gas processing and allow for the creation of new jobs in the Nenets Autonomous Area,” commented Artem Dovlatov, Deputy Chairman and Member of the Management Board at VEB.RF.
“Advanced gas processing and methanol production represent not only a promising direction for increasing Russian exports, but also the opportunity for transitioning to more environmentally-friendly fuel. According to projections, along with other Russian projects involving the creation of methanol plants, the implementation of this project in the gas chemical complex will make it possible to double Russian methanol exports to 8 mln tons. The outstanding professional expertise of VTB in supporting such projects is making it possible to formulate optimal economic solutions that open new opportunities for the development of individual cities and entire regions. For us, one of the critical aspects of implementing such projects is protecting the Arctic’s fragile ecosystem, which is precisely why we’re relying on the use of the best-available technologies,” emphasized Vitaly Sergeychuk, Senior VP of VTB Bank.
“Development of the Russian Arctic is one of the highest-priority tasks of the Russian Federation. The project being implemented by RusKhim Group will not only make it possible to proceed with the development of Arctic gas condensate fields, which have been in reserve for over 40 years now, but will also serve as a springboard for the development of a new deep-water seaport at Indiga. One of the project’s important aspects is its focus on the advanced processing of natural gas and the ramping up of non-resource non-energy exports. The Nenets Autonomous Area will also gain a significant number of new jobs – including vacancies for highly-skilled personnel. The implementation of such an ambitious, technically challenging and meaningful project would be difficult without the support of financial institutions and the state. In this connection, we’d like to express our appreciation to the syndicate’s members for their active interest and work on the project, as well as our gratitude to the RF Ministry for the Development of the Russian Far East and Arctic for their support in creating a favorable investment climate for the implementation of challenging and important projects in our Arctic,” said Vitaly Yuzhilin, shareholder and initiator of the project.