Page 10 - FSUOGM Week 30 2019

FSUOGM INVESTMENT FSUOGM
Lukoil takes FID on polymer plant
RUSSIA
The plant will increase Lukoil’s polymer output substantially.
RUSSIA’S Lukoil has taken a nal investment decision (FID) on a polypropylene (PP) plant at its re nery in Kstovo, its CEO said last week.
e private oil rm took the step a er weigh- ing up whether to build the facility in Kstovo or at another of its processing plants in Perm. According to a June report by Russia’s Kommer- sant, a key consideration for the location was whether Lukoil could secure tax breaks from local authorities.
Speaking with reporters on July 23, Lukoil head Vagit Alekperov said the project would cost $1bn and produce around 500,000 tonnes peryearofPP. erewaspreviouslysomeuncer- tainty about the plant’s capacity, with Lukoil suggesting it could range between 300,000 and 700,000 tpy.
Due online in 2023, the plant will increase Lukoil’s PP production capacity substantially. The company can currently turn out up to 200,000 tpy of the polymer, including 120,000
tpy at a plant in southern Russia and 80,000 tpy at a complex in Bulgaria.
The PP unit will process propylene from Lukoil’s catalytic cracking facilities in the area. Its production will be exported, according to Alekperov.
It is not the only new investment underway at the 340,000 barrel per day Kstovo re nery. Lukoil aims to launch a new 2.1mn tpy delayed coking unit (DCU) at the site in 2021, in order to raise light product output at the expense of fuel oil yields. It is also constructing a new 0.8mn tpy isomerisation facility and overhauling the re n- ery’s bitumen production capacity.
Future output from the PP plant will have to compete with production from a ra of other similar projects underway in Russia at present. e rst of these developments is come onstream should be a 500,000 tpy PP train in Tobolsk next year, operated by Russian polymer market leader Sibur.™
PERFORMANCE
Nostrum sees further dip in output, revenues
KAZAKHSTAN
The company said the result was in line with its expectations.
LONDON-LISTED Nostrum Oil & Gas has said its rst-half operational results were in line with expectations, despite a drop in both reve- nues and production.
The company, which works in western Kazakhstan’s Pre-Caspian Basin, reported aver- age oil and gas production of 31,096 boe/day in the six-month period, versus 32,524 boe/day a year earlier.
Nostrum plans to publish its full nancial results next month, although it said this week it anticipated more than $174mn in revenues for January to June, down from $191mn in the same period last year. On the upside, its cash position improved from $75.7mn at the end of March to above $120mn at the close of last month.
First-half results were “in line with expecta- tions,” Nostrum CEO Kai-Uwe Kessel said in a July 30 statement. He added that the third gas treatment unit (GTU) at the company’s Chin- arevskoye eld was not undergoing hot commis- sioning, with its launch anticipated at the end of September.
“Financially the rst half was positive as pro- duction was in line with expectations and prod- uct prices were higher than our budget leading to higher than forecast revenues and operating cash
ow,” Kessel explained.
Nostrum has been working in Kazakhstan
for more than two decades. Chinarevskoye is currently its only asset in production, although the company operates several exploration sites in its vicinity.
Several years ago, Nostrum’s management outlined plans to ramp up production to above 100,000 boepd by 2020, but low oil prices and operational di culties have seemingly put an end to these ambitions. Notably, Chinarevskoye’s third GTU was initially due online in 2017 but was delayed because of slow equipment delivery among other factors.
Nostrum is currently discussing ways of boosting shareholder value, including a possible sale of its equity. It also recently agreed to buy a 50% stake in a local operator with rights to the Stepnoy Leopard licences near Chinarevskoye.™
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Week 30 31•July•2019