NIPIGAZ terminated the EPC contract for the gas processing plant in Ust-Luga

MOSCOW, March 14 – RIA Novosti. NIPIGAZ (part of the Sibur group) has suspended work on an EPC contract at a gas processing plant in Ust-Luga, the company said.

Since 2019, NIPIGAZ has been acting as a general designer of a complex for processing and liquefying natural gas (LNG) in the Ust-Luga region (Leningrad region). And in 2020, the operator of the Ruskhimalliance project (a joint venture between Gazprom and Rusgazvydobuvannya) additionally signed an EPC contract with NIPIGAZ (design, procurement and construction) for a gas processing plant with a capacity of 45 billion cubic meters per year and off-site facilities, as well as contract for the management of the design of a liquefied natural gas plant.

“This contract has been terminated on March 12, 2021. NIPIGAZ JSC will continue to perform the function of general designer of the entire gas processing and LNG production complex in Ust-Luga,” the message says.

NIPIGAZ notes that it has completed the main design solutions for the processing units of the gas processing plant and off-site facilities, developed the general layout of the plant, prepared the design documentation for the gas processing complex and the LNG complex. Licensors of key technological processes have been identified together with Ruskhimalliance, a market for suppliers of basic equipment has been worked out, the budget and schedule of the project have been clarified. By the end of March, the state examination of the design documentation will be completed, which will allow obtaining a building permit in April of this year and starting construction and installation work at the site of the future plant.

“At the same time, the customer did not finally decide on the financing scheme, which did not allow determining the country of origin of a significant number of pieces of equipment, including restrictions on its localization. There were also discrepancies in assessing the size of the risks in the project at the implementation stage and their distribution between the customer and the contractor within the framework of EPC-contract. These factors led to the customer's decision to terminate work under the EPC-contract “, – explains NIPIGAZ.

“If necessary, NIPIGAZ JSC will provide Ruskhimalliance LLC with any other support in the further implementation of the project,” the company adds.

Author: wedocount

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