PIEF-2013. A petrochemical cluster will be created in the Povolzhsky federal District

Today, on June 21, at the Petersburg International Economic Forum, NK Rosneft OJSC and the petrochemical holding SANORS declared the creation of a joint venture on the basis of the gas processing assets of Rosneft in Orenburg and Samara Regions and SANORS petrochemical assets.

The Rosneft share of the JV is supposed to be at least 50%, and the share of SANORS should not exceed 50%. President, Chairman of the Board of NK Rosneft OJSC Igor Sechin and the President of “SamaraNefteOrgSintez Managing Company” LLC Igor Saglaev signed the agreement in the presence of Nikolay Merkushkin, Governor of the Samara Region.

Implementation of the project of construction of the world-class new petrochemical facility in the Samara Region is the purpose of the cooperation. The facility will be oriented to import substitution and meeting the growing internal demand to key polymers and other chemical products, which would be competitive by quality and technology parameters. The project is unique in the way that a real possibility will appear to integrate the oil and gas extracting and processing assets of Rosneft with the active and under construction petrochemical industries of SANORS. According to the representatives of SANORS, the implementation of the strategy will lead to the appearance of the new leader of the petrochemical industry of the Russian Federation at the global scale.

The parties are planning to execute all legal documents of creation of a joint venture by the end of 2013. The Law Firm "YUST" and Akin Gump company were the legal advisers to SANORS. Advocate Artem Kukin, Doctor-at-Law, Partner of the Firm, is the project leader from the part of the Firm.

Commentaries by the participants of the event:

Igor Saglaev, President of SANORS petrochemical holding:

“I regard the signing of the agreement with NK Rosneft OJSC as a key stage of the implementation of the strategy of construction of a word-class petrochemical facility in the Samara Region, which SANORS suggested. A deep integration with the oil and gas extracting and processing resources of Rosneft will enable operational and other synergies in the sphere of oil processing and petrochemistry. I am deeply convinced that this will further stimulate the accelerated development of the newly created JV and the appearance of the new leader of the petrochemical industry of the Russian Federation at the global scale” (source of the publication – the official press release of the holding).

Nikolay Merkushkin, Governor of the Samara Region:

“The signing of the agreement between NK Rosneft OJSC and the SANORS petrochemical holding is a landmark for the oil and gas chemical industry of the Samara Region. These companies conduct an active investment activity in the territory of our Region, modernizing active industries and constructing new ones, and we have built constructive and mutually beneficial relations with them. The petrochemical facilities are currently responsible for over 40% of the entire industrial production of the Governorate. We are planning the creation of a powerful petrochemical cluster. I am convinced that this agreement will speed up the implementation of this ambitious project, which, in turn, will positively affect the efficiency of social programs ((source of the publication – the official release of the press service of the Regional Government).

Advocate Artem Kukin, Doctor-at-Law, Partner of the Law Firm "YUST":

“We are glad to take part in such an important project. The role of its implementation cannot be overestimated, since the planned level of execution and the economic goals of the parties will have a direct and significant influence over the life of the Region and the entire State as well. Since our Firm’s specialists have an extensive experience of cooperation with petrochemical ventures, we may be sure that the provided legal assistance will be of the highest quality”.

For reference:

NK Rosneft OJSC is the largest public oil and gas company by the volume of extraction and reserves. It owns powerful and modern facilities of oil and gas extraction, oil and gas processing and refining in Samara and Orenburg Regions as well as its own distribution network and scientific research departments.

SANORS petrochemical holding - “SamaraNefteOrgSintez Managing Company” LLC (city of Novokuybyshevsk) was created in 2011 on the basis of the ventures of SamaraOrgSintez CJSC, Neftehimia CJSC and “Novokuybyshevskaya Petrochemical Company” CJSC. The venture NK TEC-2 was also included in the holding in 2012. The industries of SANORS produce a large number of petrochemicals - phenol, acetone, alpha-methyl-sterol, ethylene, synthetic ethanol, alkylphenols etc.