Ministry of Economic Development of the Russian Federation approved the project SIBUR APG processing in the framework of the Kyoto Protocol

Moscow, 24.01.2011Y.
The Ministry of Economic Development of the Russian Federation approved the second phase of the expansion of the South Balyksky gas processing plant as a project carried out in accordance with Article 6 of the Kyoto Protocol to the UN Framework Convention on Climate Change. The overall reduction of greenhouse gas emissions in the second phase is planned in the amount of 7.1 million tonnes of CO2 — equivalent.

Also in 2010, the Economic Development Ministry has approved the draft of the first phase of the expansion of the South Balyksky GIC in the amount of 0.7 million tonnes of CO2 — equivalent.

The total reduction in emissions of greenhouse gases in the implementation of the expansion project of the South Balyksky GIC, implemented with the support and resources base NK "Rosneft", is expected to reach 9.6 million tonnes of CO2 — equivalent. The relevant calculations are confirmed by an independent accredited agency DNV (Norway), which carried out the audit of the project design document (PDD).

SIBUR has invested in the expansion of the South Balyksky GIC more than 8.5 billion. Capacity of the company has increased by 1.5 billion cubic meters. meters of associated gas per year, extracting the desired fractions of the plant as a whole has risen to 95%. The new complex consists of a compressor station, dehydration units and low-temperature condensation, propane refrigeration plant and other ancillary facilities. In fact, the complex is a separate gas processing plant, in the last decade is the first facility of this magnitude, built in Russia.


Further sale of emission reduction units planned under the agency agreement with the Savings Bank of the Russian Federation. The proceeds will be used to finance investment projects for deep processing of associated petroleum gas.

SIBUR consistently implementing a strategy to increase the reception of associated petroleum gas. From 2007 to 2010, the volume of associated petroleum gas increased from 13 billion cubic meters to more than 17 bcm. m per year and will reach in the next few years, 20 billion cubic meters year.

Background:
The implementation of the Kyoto Protocol to the UN Framework Convention on Climate Change allow Russian companies to sell foreign organizations made in the implementation of investment projects, emission reductions of greenhouse gas emissions.

In October 2009, the Government of the Russian Federation approved the "Regulations on the implementation of Article 6 of the Kyoto Protocol to the UN Framework Convention on Climate Change", according to which the operator of carbon units in Russia was appointed Sberbank. He is responsible for conducting competitions and further examination of applications. After examination a decision on the approval of projects takes Ministry of Economic Development.

In the future, the project company, whose project was approved by the Ministry, conducted by an independent accredited monitoring, which confirms the amount of emission reductions over the period. Then Sberbank records corresponding number of carbon units to the Company. After that, according to the contract of sale (ERPA — Emission Reductions Purchase Agreement) the company receives a bank cash from the buyer of carbon units.

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