A significant top level agreement between Russian oil group Rosneft and China's ChemChina Petrochemical Corporation (CCPC) will see major Chinese investment in a huge petrochemicals project in Russia's Far East.
During Russian president Vladimir Putin's recent visit to China, a Sino-Russian deal was signed which includes the proposed acquisition of a majority stake by ChemChina in the $37 billion Far-East Petrochemical Co. (FEPCO) project.
The agreement, sealed in Beijing, included a Memorandum of Understanding covering the Chinese acquisition and key stages of the investment in a complex in Nakhodka on Russia's far eastern coast. The FEPCO complex is a partnership between Rosneft and the Japanese industrial and trading conglomerate Mitsui.
The Nakhodka facility will have the world's biggest steam cracker by volume, according to Rosneft. The project will produce up to 1.4 million metric tons per year of ethylene, 600,000 tonnes per year of propylene and around 200,000 annual tonnes of butadiene in its first two phases.
With the agreement, Rosneft has attracted an important strategic partner to its big Far East project and a major step has now been taken towards the development of the planned complex, said the Russian group.