RDIF, a consortium of foreign investors and Gazprombank to invest in SIBUR’s marine terminal in Ust-Luga
Press release, 22.05.2014
Moscow, May 22, 2014 – A consortium of investors, made up of the Russian Direct Investment Fund (RDIF), a group of foreign investors and Gazprombank has come to an agreement on terms of an investment into a liquefied petroleum gas (LPG) and light oil products transshipment terminal. This terminal is owned by the Russian petrochemical holding, SIBUR, in the sea port of Ust-Luga. The transaction amount of the investment is over US$700mln.
As part of the transaction, the consortium will gain complete control over the terminal, which is not only the largest in the CIS but also the only LPG transshipment terminal in the Russian North-West. It is also one of the most modern port infrastructure facilities on the Baltic Sea. The consortium’s investment will allow the terminal to optimise its capital structure and expand its capacity for both LPG and the wide range of light oil products it processes.
Construction of the terminal and the necessary rail and port infrastructure in Ust-Luga was completed by SIBUR in 2013. Currently the terminal operates at a nominal transshipment capacity of 1.5Mtpa of LPG and 2.5Mtpa of light oil products. Simultaneously, the terminal is undergoing optimisation of operational processes and expansion plans for all products transshipped at the terminal are currently in development. The terminal is a project of national importance and was constructed as part of the federal program for development of port capacities in the Russian North-West.
According to the agreement, SIBUR will have exclusive rights to utilize 100% of the LPG transshipment capacity on the pre-agreed terms. A joint venture between the investment consortium and SIBUR will comprise the operational management of the complex, which will retain all current staff.
This agreement is planned to be signed during St Petersburg International Economic Forum and the transaction will be closed after regulatory approvals are received.
Kirill Dmitriev, CEO of RDIF, said:
"A modern LPG terminal in the Baltic Sea is a crucial step in the future development of Russian infrastructure. This latest development has a significant role to play in reducing domestic dependence on foreign ports as well as responding to the growing European consumer demand for LPG and light oil products. This transaction is a key milestone for the Russian infrastructure sector and is in line with RDIF’s strategy to invest in infrastructure assets. This allows the RDIF to gain attractive returns while the company can concentrate on its main business".
Dmitry Konov, CEO of SIBUR, said:
"Construction of the terminal in the port of Ust-Luga has created an effective transportation route for Russian LPG and light oil products to Northern and North-Western European markets. Thus, we have not only managed to gain access to new, previously inaccessible markets, but have also decreased Russia’s dependence on foreign port infrastructure. As a result of the deal SIBUR returns its investment in the project while gaining long-term guarantees on capacity utilisation in return. This will allow us to then expand our investments in other, more specialized core business projects in the sphere of byproducts of oil and gas monetisation along with the manufacturing of a wide range of petrochemical products for Russian consumers. "
Alexey Matveev, Deputy Chairman of the Board of Gazprombank, said:
"Investment in Russian infrastructure is a core area of Gazprombank's activity. The LPG and light oil products terminal in Ust-Luga is an attractive investment opportunity due to its fundamental competitive advantages and significant potential for value appreciation in future."
Russian Direct Investment Fund (RDIF) was established in 2011 to make equity co-investments, primarily in Russia, alongside reputable international financial and strategic investors. Based in Moscow, RDIF’s management company is a 100% subsidiary of Vnesheconombank. Further information at www.rdif.ru.
SIBUR is a uniquely positioned, vertically integrated gas processing and petrochemicals company. SIBUR has Russia’s most extensive integrated infrastructure for processing associated petroleum gas (APG) and natural gas liquids (NGLs) into energy products, which are sold in both Russian and world markets and also processed internally. SIBUR is a Russian petrochemicals leader with globally competitive operations, serving growing markets for basic polymers, plastics, synthetic rubbers and other products.
As of 31st March 2014, SIBUR operated 27 production sites across Russia and employed over 27,000 personnel, serving more than 1,400 large customers in the energy, chemical, consumer, construction, automotive and other industries in approximately 70 countries. Further information at www.sibur.com
Gazprombank is one of the three major banks within Russia, in terms of key performance indicators, and one of the three major banks of the Central and Eastern Europe in terms of its equity. It is also one of the largest investors in Russian infrastructure projects. Further information at www.gazprombank.ru
Russian Direct Investment Fund
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