SIBUR and Sibneft Create Joint Gas Energy Enterprise

SIBUR and Sibneft have signed a memorandum on the creation of a joint gas and energy company to be called the November Gas and Energy Company. The company will be created on the basis of the Muravlenkovsky gas processing plant and compressor stations in the Yamal-Nenets district. This was revealed to Rosbalt today by SIBUR's press office.

According to the agreement, SIBUR will have a 51% in the new company, and Sibneft a 49% stake. Profits will be divided evenly. The firm will process accompanying gas and create energy generation capacity. The firm will sell accompanying gas and gas condensate at prices agreed by the two shareholders. Infrastructure belonging to SIBUR-Tyumen will be used to transport gas and liquid hydrocarbons. During the course of January experts from SIBUR and Sibneft intend to determine the size of the company's capital, and develop a concept for the company's organizational and legal structure.

The establishing by the two leading Russian companies of a single investment, technological and marketing policy will help to increase their resource base and production volume, make their investment policy more effective, and increase production at their petrochemical enterprises, stressed the press service. SIBUR's president Dmitry Mazepin stressed that the partnership would increase the petrochemical holding's opportunities for processing and using residue gas. He also noted that 'SIBUR can now independently use gas as a source of electrical energy. For us this is a new type of business, which will bring the holding extra profits, and in the future a rational diversification of the business may become the decisive factor in competition in the petrochemical market.'

According to Sibneft president Yevgeny Shvidler, the company is counting on a considerable increase in the efficiency of its gas extraction, processing and sales operations as a result of the agreement. He said that 'this is Sibneft's second major project connected with gas extraction, after the development of the West Ozerny field in Chukotka. The new agreement will make our use of accompanying gas more efficient. In the future we are planning to actively develop the gas section of our business.'

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