Page 9 - FSUOGM Week 03 2020

FSUOGM PROJECTS & COMPANIES FSUOGM
Gazprom Neft announces $80mn upgrade at Serbian refinery
RUSSIA
McDermott unit Lummus Technology has a FEED contract for the project.
RUSSIA’S Gazprom Neft has announced it will spend more than €72mn ($80mn) on modern- ising a catalytic cracker at the Pancevo refinery in Serbia.
The company operates the 96,400 barrel per day (bpd) Pancevo plant through its majori- ty-owned subsidiary NIS. It reported last week it had concluded a deal with McDermott unit Lummus Technology for front-end engineering design (FEED) work for the upgrade project.
Gazprom Neft will also construct a produc- tion unit for high-performance gasoline compo- nents as part of the scheme. Its output of heavy fuel oil will meanwhile wind down to zero.
Pancevo is one of two refineries in Serbia, both owned by NIS, which in turn is 56.2% con- trolled by Gazprom Neft. The other is situated in Novi Sad, with a throughput capacity of 50,000 bpd.
According to Gazprom Neft, Pancevo is one of the most modern refineries in Europe. NIS, whose other main shareholder is the Ser- bian government with a 29.9% stake, invested
€500mn in the first stage of the plant’s moderni- sation, completed in 2012. The project involved construction of a hydrocracking and hydrotreat- ing complex, enabling the production of Euro-5. Lummus was involved in the work.
The refinery is now undergoing a second stage. As part of this phase, Gazprom Neft broke ground in late 2017 on a new deep con- version complex featuring a delayed coker – a project valued at more than €300mn. Its launch later this year will expand the plant’s motor fuel production, and allow it to manufacture coke.
Gazprom Neft dominates Serbia’s oil indus- try. In addition to its refinining business, NIS also operates oil and gas fields in the country, and holds a 12.7% stake in petrochemical firm HIP Petrohemija.
Meanwhile Gazprom Neft’s parent company Gazprom supplies practically all of Serbia’s gas, with shipments totalling 2.15bn cubic metres in 2018. It is also investing in new gas-fired power plants in Serbia, the first of which is due to start up in Pancevo this year. ™
Gazprom outbids rivals for Siberian block
RUSSIA
Gazprom outbid rivals Novatek and Rosneft.
RUSSIA’S Gazprom has bested rival produc- ers Novatek and Rosneft in a state auction for a major gas block in the Yamalo-Nenets region of Western Siberia.
Gazprom paid RUB12.1bn ($196mn) for a 25-year exploration and production licence to the Sopochny block, state subsoil agency Rosne- dra revealed on January 21, versus a starting price for bids of only RUB0.38bn. It saw off com- petition for the licence from two wholly-owned subsidiaries of Novatek, and Rosneft.
The Sopochny block holds 261bn cubic metres (bcm) of gas and 98mn tonnes of con- densate in D0-category (possible) reserves, according to Rosnedra. Only limited surveying has taken place at the site, suggesting Gazprom may have paid a significant premium.
Gazprom is eager to replenish its reserves with new discoveries in northern Russia. But the Sopochny block likely had more value to Novatek, which operates the neighbouring Geofizicheskoye gas field. Novatek wants to use Geofizicheskoye’s resources to underpin con- struction of another LNG plant, in addition to
its Yamal LNG and Arctic LNG-2 projects. Gazprom seldom pays so much for a licence, preferring to invest in exploration of its existing acreage. The last time it competed so fiercely for a licence was in 2016, when an auction was held for the Layavozhskoye and Yaneyvisskoye fields in Yamalo-Nenets, con- taining 82mn tonnes (600mn barrels) of oil
and 223bn m3 of gas.
Gazprom had little need for the fields, but
nevertheless made an offer of RUB23bn for them to outbid Rosneft, which had wanted the resources to support its Pechora LNG venture. Without access to these fields, Rosneft axed Pechora LNG, which would have been its first LNG export project.
Rosneft also took part in another auction this week, acquiring upstream rights to two other blocks in Yamalo-Nenets, Mitikyakhsky-1 and West-Kharampursky. It paid RUB918mn for Mitikyakhsky-1, estimated to hold 19mn tonnes (139mn barrels) of oil, and RUB443mn for West-Kharampursky, assessed to contain 614,000 tonnes (4.5mn barrels). ™
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