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Vologda Region Governor Oleg Kuvshinnikov and PhosAgro CEO Andrey Guryev Discuss Prospects for Development of the Company’s Chemical Production Complex in the Vologda Region

22 May 2014
St. Petersburg – Today at the St. Petersburg International Economic Forum, Acting Governor of the Vologda Region Oleg Kuvshinnikov and PhosAgro (“the Company”) CEO Andrey Guryev discussed the prospects for the further development of the Company’s chemical production complex in the Vologda Region.

At the meeting, PhosAgro CEO Andrey Guryev presented the framework of the Company’s development strategy through 2020, which was approved by the Board of Directors on 19 May 2014, to the Governor of the Vologda Region. 

PhosAgro-Cherepovets, which is located in the Vologda Region, is the site of PhosAgro’s largest investment project: the Company plans to complete construction of a high-tech ammonia production line with a capacity of 760 thousand tonnes per year by 2017, with total investments of RUB 25 billion (including infrastructure).  PhosAgro-Cherepovets will also be the site of investment projects related to the processing of ammonia, which will enable PhosAgro to increase its fertilizer production capacity by 25%.

Andrey Guryev thanked the leadership of the Vologda Region, and Oleg Kuvshinnikov personally for his contribution to the dynamic growth of the region’s economy, including his constant attention to and active support for PhosAgro’s industrial and social projects.  In large part due to this support, PhosAgro-Cherepovets is growing and is the largest taxpayer in the Vologda Region.  This is mainly thanks to the creation of effective public-private partnerships for the implementation of PhosAgro’s investment and social projects in the region.

The Company’s new projects in the Vologda Region were not the only topic of discussion at the meeting.  The participants also discussed the prospects for creation of a natural gas chemical complex in the Vologda Region.  This project, which would not require any capital investments from PhosAgro, could rationalize the use of natural gas by separating low- and high-density fractions from the gas.  This separation process would enable the use of low-density (methane) fractions for production of ammonia and mineral fertilizers, as well as at Severstal’s production facilities.  The higher-density products could be used as hydrocarbon raw materials for a natural gas chemical complex in the Vologda Region.

PhosAgro is effectively implementing its part of this project already, aimed at the deep processing of methane fractions of natural gas, with the construction of a new ammonia production line, the product of which will be used for marketable mineral fertilizers.  The second part of this project, which has yet to be implemented, has to do with the construction of facilities for the processing of heavier fractions of natural gas, and is being negotiated by the Governor of the Vologda Region Oleg Kuvshinnikov with representatives of Gazprom and Sibur.

For PhosAgro such a project would make it possible to lower the cost of ammonia production, while for oil & gas chemical producers it would provide raw materials for production of polymers and composite materials.  The result of such a project would enable deeper and more efficient processing of natural gas into products with high value added.

During the meeting the participants repeatedly underscored that the Vologda Region already has the necessary infrastructure and qualified personnel to implement such an ambitious project.  The gas chemical cluster could create around two thousand new jobs, while tax payments to local, regional and federal budgets could increase by RUB 3-4 billion according to specialists’ forecasts.  The gas chemical cluster would serve as a powerful impulse for the development of not only the Vologda Region, but also the entire Northwest of Russia.