Bloomberg News

Gazprom Unit Sibur to Increase Petroleum-Gas Refining by 43%

January 18, 2007

OAO Gazprom's petrochemicals unit, OOO Sibur, plans to increase petroleum gas refining 43 percent by 2011 to cut flaring and pollution.

Petroleum gas refining will rise to about to 20 billion cubic meters a year, up from 14 billion cubic meters processed last year, Sibur said today in an e-mailed statement. The company this year plans to modernize Yuzhno-Balyksky gas refinery to raise its capacity 63 percent to 1.5 billion cubic meters a year.

``The project development will allow also to increase yields from the gas processing,'' the company said.

Petroleum gas, or associated gas, is pumped together with oil extraction. Some Russian companies have to burn the gas as because no infrastructure exists at remote fields to transport and refine it. Since the Soviet Union started exploration of West Siberia in the 1970s, companies have burned at least 200 billion cubic meters of gas, enough to fuel the European Union for about eight months as of 2005 consumption, according to Sibur.

Yuzhno-Balyksky, built in 1978, is processing gas from OAO Yuganskneftegaz, which pumps more than 10 percent of Russia's oil. Yugansk was taken over by OAO Rosneft in December 2004 after the government confiscated the unit from OAO Yukos Oil Co.

To contact the reporter on this story: Eduard Gismatullin in London at egismatullin@bloomberg.net

To contact the editor responsible for this story: Daniel Tilles on dtilles@bloomberg.net


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