MOSCOW (MRC) -- China National Chemical (ChemChina) has signed a memorandum of understanding (MoU) with Rosneft to acquire a majority stake in Far-East Petrochemical Company (FEPCO) project in Nakhodka, Russia, said Chemicals-technology.
The agreement was signed by Rosneft management board chairman Igor Sechin and ChemChina chairman Ren Jianxin during Russia President Vladimir Putin's visit to China. The transaction is subject to due diligence, and corporate and regulatory approvals. "The achieved agreements are indicative of a special level of cooperation with our Chinese partners."
FEPCO is a petrochemical and crude oil refining project that is planned to be completed in 2020. Being executed in three phases, the complex will have a throughput capacity of 30 million tonnes per annum.
The complex will produce ethylene, propylene, benzene, and butadiene following the completion of the first two phases, and 50,000t a year of linear alpha-olefins. ChemChina and Rosneft also signed a heads-of-agreement, pursuant to which Rosneft will buy a 30% stake in the Chinese firm.
The parties have entered into a MoU to supply alternative crudes and other feedstocks to CCPC ESPO and Sokol, and will sign a long-term contract for delivery of four million tonnes within three years with an option to extend contract.
Sechin said: "The achieved agreements are indicative of a special level of cooperation with our Chinese partners.
"Joining efforts will further improve efficiency of our work by developing cooperation in all areas, including such strategically important projects as FEPCO."
ChemChina produces special chemical materials, basic chemicals, oil refining, agricultural chemistry, rubber products, and chemical equipment.
MRC