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FSUOGM INVESTMENT FSUOGM
Lukoil mulls new petrochemical plant
RUSSIA
RUSSIAN oil producer Lukoil is weighing up options for the construction of a new petro- chemical plant valued at $1bn.
e company aims to reach a nal decision on the project by the end of this year, the deputy head of Lukoil’s Kstovo oil re nery in Nizhny Novgorod, Pavel Logunov, said in an interview with Moscow business daily Kommersant on June 20. e plant should start up in 2023, he said, with production slated to reach 300,000- 700,000tpy of polypropylene (PP).
According to Logunov, the facility will likely be placed in Kstovo, although Lukoil may decide to relocate it to Perm unless Nizhny Novgorod authorities grant the company investment tax breaks. Lukoil has asked the regional gov- ernment for RUB4.4bn ($70mn) in tax relief between now in 2024, in return for its construc- tion of new processing units.
Lukoil plans to commission a 2.1mn tpy delayed coking unit (DCU) at the Kstovo plant in 2021, aimed at boosting production of light products and slashing fuel oil output. It is also building a new 0.8mn tpy isomerisation facil- ity and overhauling its bitumen production capacity.
Lukoil is among a number of Russian oil
producers looking to diversify their business by expanding into petrochemicals – one of the most profitable segments in the country’s oil industry in recent years thanks to regulatory support and expanding demand. e company currently produces 120,000 tpy of PP at a plant in the southern Stavropol region and a further 80,000 tpy at a complex in Bulgaria.
The new PP plant will process propylene produced at Lukoil’s catalytic cracking facilities in Kstovo. If built, it will have to compete with other larger petrochemical projects in Russia operated by market leader Sibur, including the ZapSibNe ekhim plant in Tobolsk, scheduled to start up later this year and produce 500,000 tpy of PP at full capacity.
e Kstovo re nery is capable of processing up to 340,000 bpd of oil, representing around a third of Lukoil’s total re ning capacity. It su ered a 40% decline in EBITDA last year to 21.3bn rubles ($340mn) because of macro-economic factors such as the rising domestic cost of crude oil in Russia. In a recent research note, VTB Cap- ital estimated that the plant’s modernisation pro- gramme would more than double its EBITDA and li its re ning margins by $40 per tonne ($5.5 per barrel).
Gazprom, partners to invest US$700mn in Uzbek gas venture
UZBEKISTAN
RUSSIAN state gas company Gazprom is taking part in a $700mn project targeting gas resources in Uzbekistan’s northwest Ustyurt basin.
Uzbekistan’s cabinet approved a plan on June 17 to develop the Urga, Akchalak and Chandyr groups of gas elds, as well as undertake explo- ration at the Sechankul, Akdzhar and Chimbay contract areas.
The work will be undertaken by Natural Gas-Stream – a joint venture (JV) between a Gazprom subsidiary called Gas Project Devel- opment Central Asia (GPD) and Uzbekistan’s national oil concern Uzbekne egaz (UNG). A Cyprus-registered group called Altmax Holding is also involved, reportedly owned by businessmen Andrey Filatov and Bakhtiyor Fazylov.
Under the project’s feasibility study, the part- ners will invest $243.4mn of their own funds as well as a further $458mn lent by Bank GPB International, a Luxembourg-registered unit of Gazprom’s nancing arm, Gazprombank. ey
aim to produce up to 1.633bn cubic metres per year of natural gas at the Urga, Akchalak and Chandyr fields for export, along with 94,500 tonnes of gas condensate and 80,000 tonnes of various other fuels such as gasoline, diesel, kero- sene, lique ed gas and fuel oil.
Gazprom and its a liates are working at a number of upstream projects in Uzbekistan, which has taken steps over recent years to open up its oil and gas sector to foreign invest- ment. e Russian rm entered into a produc- tion-sharing agreement (PSA) in October last year to develop the Dzhel gas deposit, which also lies in the Ustyurt area and is slated to come on stream in 2021.
It has another PSA for the nearby Shakhpa- khty eld, where production peaked at 360mn cubic metres per year in 2016, and Gazprom- bank is also a member of the Russian consortium developing the M25 eld near the border with Afghanistan, where output is expected to plateau at 4 bcm per year.
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w w w . N E W S B A S E . c o m Week 25 26•June•2019
