By Vladimir Soldatkin
MOSCOW, Nov 21 (Reuters) - U.S. oil services company
McDermott International said on Thursday that its
participation in a huge petrochemical project in Russia,
announced this week, was in full compliance with the law and did
not breach international sanctions against Moscow.
Royal Dutch Shell pulled out of the same Baltic
Coast project in April, saying Russian gas giant Gazprom
had changed its final concept for the project which
initially had been designed to produce only liquefied natural
gas.
Sources, however, said one factor behind Shell's decision
was also that Gazprom had suddenly brought in another partner
with links to businessman Arkady Rotenberg who is on a U.S.
sanctions blacklist.
Houston-based McDermott will provide ethylene technology and
extended basic engineering for two ethylene crackers at what is
the largest ethylene integration project in the world, it said
on Monday. It was awarded the contract by Baltic Chemical
Company (BCC), which, according to its website, is 100% owned by
RusGazDobycha.
RusGazDobycha's parent company, National Gas Group (NGS),
was previously controlled by blacklisted Rotenberg, an ally of
Russian President Vladimir Putin. However, a spokeswoman for
Rotenberg said on Thursday that he sold out of NGS in 2016 and
has no stake currently in its subsidiary BCC.
The United States has imposed various sanctions against
Russian enterprises and individuals following Moscow's
annexation of Crimea from Ukraine in 2014 and accusations -
which Russia denies - of meddling in the U.S. presidential vote
in 2016.
"Since that time, and as of the time of our agreement, Mr.
Rotenberg sold interests in BCC and no longer has ties to the
company," a McDermott spokeswoman told Reuters in emailed
comments.
"Our compliance team conducted a thorough review and due
diligence which, together with certain control mechanisms in
place, made us comfortable from a compliance standpoint."
Two sources close to Shell told Reuters at the time that
Gazprom had not consulted Shell about bringing in RusGazDobycha,
but instead presented it with the plan as a fait accompli.
RusGazDobycha and Gazprom are equal partners in the wider
Ust-Luga petrochemical complex, according to Gazprom's website.
Located near Russian shores on the Gulf of Finland, the
natural gas processing chemical plant will be comprised of two
ethylene cracking facilities, each with an annual capacity of
1.4 million tones, McDermott said.
McDermott's Lummus Technology will provide both the Process
Design Package (PDP) Engineering and the license for olefin
production and recovery technology, the company said.
Work on the project will begin immediately and the contract
award will be reflected in McDermott's fourth quarter 2019
backlog.
RusGazDobycha has said the first line of the petrochemical
complex is expected to be completed in the third quarter of
2023, and the second line in the third quarter of 2024.
(Reporting by Vladimir Soldatkin
Additional reporting by Gleb Stolyarov
Editing by Katya Golubkova and Susan Fenton)
