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12-03-2013

SIBUR and TNK-BP extend cooperation and define the long-term format of APG processing JV

SIBUR and TNK-BP have signed a set of agreements that define the format of cooperation between the parties within OOO Yugragazpererabotka, an APG processing joint venture (JV), for the period from 2017 through 2026.

The parties have extended the key agreements related to the supply of associated petroleum gas (APG) and purchase of dry gas and natural gas liquids (NGLs) that are products of APG processing. Both have also revised the guaranteed APG volumes that will be supplied by TNK-BP to Nizhnevartovskiy and Belozerniy GPPs as part of the JV. The parties have extended the term of the JV for an indefinite period of time, while terminating the call option agreements(1).

The agreements further strengthen the long-term, mutually beneficial partnership between SIBUR and TNK-BP. During the past five years of successful cooperation, SIBUR and TNK-BP have significantly increased the volumes of APG processed by the JV’s GPPs. In 2012, Yugragazpererabotka processed over 12.5 billion cubic metres of APG, a 9% increase from 2011 and a 71% surge against 2007 levels – the year when the JV was established.

In 2012, Yugragazpererabotka completed a number of important investment projects, including the construction of a third compressor station at the Nizhnevartovskiy GPP. The project facilitated an increase in APG processing volumes at the GPP by 760 cubic metres to 6.2 billion cubic metres per annum. Joint capital expenditures on the project totaled approximately RR 2.7 billion net of VAT.

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