Rosneft plans giant cracker complex in Russia

Moscow - Russian oil giant Rosneft Group is pressing ahead with a huge joint venture petrochemicals and refining project in Russia’s far east despite current political tension and the West’s economic sanctions against Russia over Ukraine.

The $37-billion complex planned for Nakhodka at the south eastern tip of Russia on the Sea of Japan, will have the world’s biggest steam cracker by volume, according to the company.

The project will produce up to 1.4 million tonnes per year of ethylene, 600,000 tonnes per year of propylene and around 200,000 annual tonnes of butadiene in its first two phases.

This three-stage project, originally conceived in 2010, has seen the first phase, involving the installation of refining facilities with a throughput of 12 million tonnes annually, delayed. It will now start up in 2020.

Phase II involves the construction of a petrochemicals plant with scheduled capacity of 3.4 million tonnes annually. A third phase, due for completion by 2028, will boost the Nakhodka complex refining output by a further 12 tonnes and double its petrochemical capacity.

Feedstock for the complex, a joint venture between Rosneft offshoot Far East Petrochemical (FEPCO) and Japanese industrial and trading conglomerate Mitsui, will primarily be sourced by the oil giant’s eastern refineries of Achinsk and Komsomolsk, as well as the Angarsk Petrochemical in Central Asia.

Rosneft signed a license agreement with Ineos Technologies to use Innovene technology for downstream polymer production of polypropylene and mono and bimodal high density polyethylene, as well as the Innovene G gas phase process for linear low density PE and high density PE.

The complex will add value to Rosneft’s abundant crude oil resources and its location was selected close to the deep water port of Vostochny, the largest in the Russian Far East, to allow it to serve demand in Southeast Asian markets.

In addition to refining and petrochemicals, the Far East project will include a marine terminal to store and offload hydrocarbon products on vessels in the ice-free port of Nakhodka.