BEIJING—Russian energy company Rosneft and China National Chemical Corp. have signed an agreement to set up a joint venture, the companies announced Sept. 4.
Signed on the sidelines of the negotiations between Russian president Vladimir Putin and his Chinese counterpart Xi Jinping, the agreement will set up of a JV to further implement Russia's Far-Eastern petrochemical company (FEPCO) project.
Rosneft will hold 60 percent and ChemChina 40 percent of the shares in the JV.
The financial and operational structure of the JV will be defined by the parties during further negotiations.
The document specifies the timetable for front end engineering and design and start of site infrastructure preparation and confirms a roadmap for FEPCO project delivery.
“The formation of the JV will allow us to efficiently structure the development of one of the most promising petrochemical projects in the world with direct access to the Asian-Pacific market,” said Rosneft CEO Igor Sechin.
“The FEPCO project is positioned to provide high value-added chemical products covering Asian-Pacific markets. It will also strongly facilitate the development of infrastructure in the Far East region,” said ChemChina president Ren Jianxin.
The companies signed an earlier document in June for the construction of what ChemChina described as “one of the largest industrial complexes in Russia.”
In October 2015, Rosneft, Pirelli and Synthos signed a memorandum of understanding to study and build synthetic rubber plant in Nakhodka within the petrochemical cluster of the FEPCO project.
Tire maker Pirelli, now owned by ChemChina, is a key research and development partner in the rubber production plans at FEPCO, which has a goal to produce, among other materials, styrene butadiene rubber for ‘green' tires.
Rubber produced at FEPCO will be used by Pirelli in tire production facilities in the South Pacific.
In April of last year, Polish company Synthos was brought on board to conduct feasibility studies on various topics, including the operation of the plant, market studies, investments and estimates of operating costs.