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AnAn Eyes Methanol Project In Russian Far East

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Summa Group, a private Russian investment holding, reported signing a memorandum of understanding (MoU) on January 19 with the Singapore-registered company on the construction of the facility. The plant will be built on the eastern bank of the River Lena in the Yakutia region, near gas fields belonging to Summa’s subsidiary, the Yakutsk Fuel and Energy Co. (YATEC).

Denis Solomatin, the project’s general director, told Russia’s Vedomosti in September that the facility was due online in the first half of 2022. It will produce up to 1.75 million tpy of methanol for sale in Asia-Pacific markets, including China, Japan and South Korea. In October, YATEC reported that Denmark’s Haldor Topsoe had been hired to provide technology for the complex.

The project’s cost is estimated to be US$1.4 billion. YATEC intends to divest a 30-35% stake in the venture to a partner by the middle of this year.

Yakutia contains almost 14 tcm of natural gas in total reserves, but monetising these resources has been difficult, owing to scarce infrastructure and limited local demand. The region will be connected to the growing Chinese gas market once the Power of Siberia pipeline comes online in late 2019. But state-owned Gazprom is to have exclusive rights to the pipeline, leaving privately owned gas fields stranded without an export route.

YATEC operates a raft of gas fields and licences across western Yakutia with combined C1+C2 reserves of 203 bcm of gas and 14 million tonnes (126 million barrels) of condensate. The company lifted 1.7 bcm of gas and around 2,600 bpd of condensate in 2016 from its two producing assets – the Srednevilyuskoye and Mastakhskoye fields. Construction of the methanol plant is expected to raise the firm’s annual gas output by a further 1.4 bcm.

YATEC is one of several energy assets of Summa Group, whose majority shareholder is Dagestan-born billionaire Ziyavudin Magomedov. The gas producer turned a net profit of 923.1 million rubles (US$16.3 million) in the first half of 2017, on the back of 3.3 billion rubles (US$58 million) in revenues.

AnAn Group is understood to have the same owners as Shanghai-based conglomerate CEFC China Energy, which agreed to buy a 14.2% stake in Russian oil giant Rosneft in September last year for US$9.1 billion. The deal has not yet been closed, however.

Source: https://newsbase.com


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