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23.05.2014 Rosneft and Alltech Group signed a Framework Agreement of Cooperation with Regard to Pechora LNG Project

Within the St. Petersburg International Economic Forum Alltech Group President Dmitry Bosov and Rosneft President, Chairman of the Management Board Igor Sechin signed a Framework agreement of cooperation with regard to Pechora LNG, the project for the development of gas fields in the Nenets Autonomous Distric, the construction of gas-transport infrastructure and LNG plant.

The Framework agreement envisages above all the terms of the creation of the joint venture for further realization of a LNG project in the North of the Nenets Autonomous District on the basis of Kumzhinskoye and Korovinskoye gas condensate fields (licenses for the development of these fields are owned by Alltech Group). Reserves of Kumzhinskoye and Korovinskoye fields by category C1+C2 constitues around 160 bcm of gas.

The document envisages procedure and periods of the introduction of assets in the joint venture and further financing of the project. The creation and registration of the JV is planned to be finalized no later than the 1st of September of 2014. Rosneft group will receive a majority share in the joint venture.

The JV will guarantee the development and the production of gas on the cited fields, the construction of gas-transport infrastructure, LNG plant and an offshore export terminal. The final configuration, designed capacity and launch date will be defined after the realization of preliminary front-end engineering and design.

Commenting on the signing Dmitry Bosov said: «The strategic cooperation with Rosneft represent a new phase of the development of the Pechora LNG project. The capabilities, possessed by Rosneft, its experience are a unique addition to the work made by our company as part of the realization of the project. The creation of the joint venture forms the basis not only for the development of gas fields in the Nenets Autonomous District, but also for the successful advance of the LNG industry in the Russian Federation”.

After the signing Igor Sechin noted that: “The development of production and export of LNG represent an important element of Rosneft Gas strategy. The participation in the Pechora LNG project along with the Dalnevostochniy LNG project, that is being already implemented on the Sakhalin island, will allow the Company in a mid-range outlook to substantially increase its LNG portfolio and strengthen the position on international market of LNG producers. Moreover we expect that the realization of the world scale LNG project located beyond the polar circle will allow Rosneft to create an infrastructure which will be used to work off efficient solutions and technologies, needed in the future for the development of vast resources of Rosneft on the Arctic shelf”.