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Rosneft Strengthens Cooperation with China

09 January 2017

Rosneft and CNPC signed an amendment to the agreement envisaging additional supplies via Kazakhstan and the prolongation of the contract signed on 21.06.2013 till 31.12.2023. Deliveries from 01.01.2017 to 31.12.2023 will amount 70 mln t, whilst the total volume of the supplies (including 21 mln t delivered previously) will amount 91 mln t within a 10-year timeframe.

Rosneft’s integrated cooperation in the energy area with Chinese partners is of strategic nature and covers all business domains – from upstream to refining and petrochemicals’ production.

Rosneft has a successful track record of implementation of supply contracts to China. From 2005 to 2016 within the long-term contracts, signed by the Company, Rosneft delivered more than 186 mln t of oil for to the amount of over USD 95 bln. The total volume of deliveries within long-term contracts will exceed 700 mln t. Additionally Rosneft is one of the leading suppliers of oil products to the Chinese market: from 2009 to 2016 the Company delivered c. 30 mln t of oil products amounting over USD 19 bln.

Together with CNPC Rosneft implements the Tianjin refinery project. Currently the parties finalized the preparation of the feasibility study and approved the technological configuration of the refinery and a complex for the production of aromatic hydrocarbons. The annual throughput of the Tiajin refinery will be 16 mln t, of which 9.1 mln t will be the refining of ESPO blend, delivered by Rosneft. The refining depth will be c. 95%.

Jointly with China Petrochemical Corporation (Sinopec Group) Rosneft successfully operates a joint venture for the production of hydrocarbons – Udmurtneft. Its annual production exceeds 6.4 mln t (the biggest producer of the region). In September, 2016 Rosneft and Sinopec signed within the the Eastern Economic Forum a binding Agreement on a joint preliminary study of the project for construction and operation of a gas processing and petrochemical complex in East Siberia. The annual throughput of the Complex Train 1 is expected at 5 bcm of natural gas with the yield of up to 3 Mt of high-tech polymers and petrochemical products for sales primarily on Russian and Chinese markets. The project resource base comprises Rosneft oil and gas fields of the Yurubcheno-Takhomsky cluster in East Siberia.

In November, 2016 Rosneft and Beijing Gas signed a Purchase and Sale Agreement and a Shareholder and Operating Agreement for the sale of a 20% stake in Verkhnechonskneftegaz (a Rosneft subsidiary) to the Chinese company. This transaction will allow Rosneft to fully implement the significant development potential of the Verkhnechonsk field, including gas production, and to confirm the strategic partnership with one of the largest distributors of natural gas in China.

In December, 2016 Rosneft and the China National Сhemical Company (ChemChina) signed a Heads of Agreement on establishing a Joint Venture. According to the terms of the document, the parties will establish a joint venture in the Bolshoy Kamen priority development territory in Primorsky Krai, Russia, to build a plant and a polymer coatings and paints facility with an annual capacity of 50 thousand t. Additionally Rosneft and ChemChina are jointly development the FESCO project. The parties aim to create a joint venture for its implementation (the JV’s composition will be as follows: Rosneft – 60%, ChemChina – 40%).

Rosneft Information Division
Tel.: + 7 (499) 517-88-97
January 9, 2017

These materials contain statements about future events and expectations that are forward-looking in nature. Any statement in these materials that is not a statement of historical fact is a forward-looking statement that involves known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements expressed or implied by such forward-looking statements to differ. We assume no obligation to update the forward-looking statements contained herein to reflect actual results, changes in assumptions or changes in factors affecting these statements.