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Russian gas chemical projects face delays after foreign partners exit -cbank

Published 2022-12-13, 07:59 a/m
© Reuters. FILE PHOTO: National flag flies over the Russian Central Bank headquarters in Moscow, Russia May 27, 2022. REUTERS/Maxim Shemetov
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MOSCOW (Reuters) - Russian gas chemical gas projects, led by energy giant Gazprom (MCX:GAZP) and privately held Sibur, are facing delays over decreased foreign involvement, a December report by the central bank showed.

Numerous foreign companies from major economic sectors, from retail to oil and gas industry, left Russia after Moscow had started special military operation in Ukraine in February.

"The timing for the implementation of some projects has shifted: the construction of a gas chemical complex in the Amur region due to the postponement of imported equipment supply," central bank said.

It said the timing for a complex to processing ethane-containing gas in the Leningrad region also changed "due to exit from the project of a European contractor".

The bank did not publish new expected timings for the implementation of the projects, nor reveal the name of foreign companies which had decided not to participate.

The Amur Gas Chemical Complex, with investments of up to $11 billion, had been initially set to start producing 2.3 million tonnes of polyethylene and 400,000 tonnes of polypropylene per year beginning in 2024-2025.

A Sibur official told Russian media in September the company saw the start of operations in 2025-2026 following sanctions.

The Gazprom-led project on the Baltic Sea coast is designed to process 45 billion cubic metres of natural gas a year, produce 13 million tonnes of liquefied natural gas (LNG), 3.6 million tonnes of ethane and up to 1.8 million tonnes of liquefied petroleum gas (LPG).

The first stage of the Ust-Luga complex is set to come on stream in 2024, while the second is to be launched in 2025.

© Reuters. FILE PHOTO: National flag flies over the Russian Central Bank headquarters in Moscow, Russia May 27, 2022. REUTERS/Maxim Shemetov

Sibur declined comments, Gazprom did not respond to a request for comment.

Central bank said investments into oil and gas production rose by 10.9% in January - September. It also said the departure of foreign investors and suspension of oil servicing companies' operations did not have a significant impact on projects implementation in Russia.

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