Gazprom and RusGasDobycha have terminated an earlier contract let to Nipigaz for delivery of EPC services on the natural gas processing portion of the planned gas processing, liquefaction, and chemical complex to be operated by RusKhimAlyans.

PJSC Gazprom and RusGasDobycha have terminated an earlier contract let to Sibur Group subsidiary Nipigaz for delivery of engineering, procurement, and construction (EPC) services on the natural gas processing portion of the planned gas processing, liquefaction, and chemical complex to be operated by RusKhimAlyans—a 50-50 special-purpose venture of Gazprom and RusGazDobycha—on the Gulf of Finland near the seaport of Ust-Luga, Leningrad Oblast, Russia (OGJ Online, June 10, 2020).

Cancellation of the June 2020 contract—under which Nipigaz was to provide EPC services covering the complex’s gas processing and off-site installations, as well as startup and commissioning works—comes as part of a decision by the partners to trim project costs, Gazprom said in a Mar. 15 release.

Gazprom—which, along with partner RusGasDobycha, will select a new contractor for delivery of EPC on gas processing operations soon—said development activities on the entirety of the Ust-Luga complex remain ongoing, with replacement of Nipigaz to have no impact on the project’s overall implementation schedule.

The RusKhimAlyans complex, which will have 13 million-tonnes/year liquefaction capacity, will receive 45 billion cu m/year (bcmy) of wet natural gas from Gazprom’s Achimov and Valanginian deposits in the Nadym-Pur-Taz region of the Yamal Peninsula. Gas remaining after processing (including ethane extraction) and LNG production, about 18 bcmy, will go into Russia’s gas transmission system. The complex will produce as much as 4 million tpy of ethane, and more than 2.2 million tpy of LPG.

LNG and LPG produced at the Ust-Luga complex will be exported, while ethane from the site will feed nearby RusGazDobycha subsidiary Baltic Chemical Complex LLC’s (BCC) proposed $13-billion ethane cracking project, which—once in operation—will produce more than 3 million tpy of polymers (OGJ Online, Nov. 9, 2020).

As of mid-February 2021, design documentation for the RusKhimAlyans gas processing, liquefaction, and off-site installations remained under state-expert view (OGJ Online, Feb. 18, 2021).