Russian petrochemical producer Sibur and gas company Gasprom signed a final agreement on long-term ethane supplies at the St Petersburg International Economic Forum Friday.
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The companies signed a preliminary agreement in February outlining plans for a supply of 2 million mt of ethane per year for 20 years for the production of polyethylene at Sibur's Amur Gas Chemical complex in the Russian Far East.
The Sibur plant in Amur was expected to have annual capacity of 1.5 million mt of ethylene.
The ethane from Gazprom will be supplied under a formula pricing agreement, according to Sibur's previous statements.
The PE plant will be "technologically linked" to Gazprom's 42 Bcm/year gas processing plant in Amur.
Gazprom's first two out of a planned six processing lines were expected to be commissioned in 2021. In addition to natural gas, the gas processing plant will produce ethane, propane, butane, pentane-hexane fraction and helium.
Asia was expected to have the largest domestic net deficit of polyethylene globally in the next 10 years. Robust economic growth is widely expected to continue to drive demand for imports into the region.
