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Lukoil eyes investment decisions on petchems project due in 2021

November 27/2020

MOSCOW (MRC) -- Russian energy major Lukoil (Moscow) is studying several potential petrochemical projects in Russia and Bulgaria, with investment decisions expected to be made on two of them in 2021, reported Chemweek.

Lukoil has signaled its intention previously to further diversify towards petrochemicals, with the company “still analyzing potential projects in the petrochemical industry,” says Lukoil’s Pavel Zhdanov, vice president/finance. “We have two projects for polypropylene (PP) production, at Nizhny Novgorod refinery (Kstovo, Russia) and at the Burgas refinery in Bulgaria,” says Zhdanov, speaking on 25 November during a briefing with analysts about the company’s third quarter results.

“As we mentioned on numerous occasions, Lukoil has a number of competitive advantages. We have experience in implementing major complex projects, we have a feedstock, and we can benefit from the infrastructure of the refineries to which these projects could be attached,” he says. “However, we’re still analyzing the risks and opportunities related to those rather long-haul projects.” Asked when an investment decision is likely to be made, Zhdanov said Lukoil is “expecting to have that decision next year.”

Lukoil announced an investment decision in June last year to proceed with a 500,000-metric tons/year PP plant at its Kstovo refinery. In September this year it selected Lummus Technology’s Novolen PP technology and basic design engineering for the facility’s production unit. Kstovo is one of Lukoil’s largest crude refineries in Russia with a throughput of 17 million metric tons/year, with the company recently adding a catalytic cracking unit that almost doubled the refinery’s production of propylene feedstock to 300,000 metric tons/year.

At Budennovsk in Russia’s far south west, the company’s Stavrolen petchems complex currently has the capacity to produce 350,000 metric tons/year of ethylene, 300,000 metric tons of polyethylene (PE), 120,000 metric tons/year of PP, and 80,000 metric tons of benzene. Lukoil has for several years been considering construction of a new gas chemicals plant at Stavrolen to crack more ethane extracted from associated petroleum gas produced by its oil and gas fields in the north of the Caspian Sea. The potential new plant would raise Stavrolen’s ethylene and PE output to around 600,000 metric tons/year each, and increase PP production to 200,000 metric tons/year.

Lukoil’s Neftohim Burgas refinery in Bulgaria, meanwhile, has a PP production capacity of 80,000 metric tons/year. Lukoil has been reported by local media as considering plans to raise its PP production capacity in Bulgaria to around 150,000 metric tons/year, with pre-front end engineering and design studies undertaken.

Lukoil produced 1.138 million metric tons of petrochemicals in 2019, with more than half produced at its Stavrolen complex.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,594,510 tonnes in the first nine months of 2020, up by 1% year on year. Only high denstiy polyethylene (HDPE) shipments increased. At the same time, PP shipments to the Russian market reached 880,130 tonnes in the nine months of 2020 (calculated using the formula: production minus exports plus imports, excluding producers' inventories as of 1 January, 2020). Supply increased exclusively of PP random copolymer.

Lukoil is one of the leading vertically integrated oil companies in Russia. The main activities of the company include exploration and production of oil and gas, production and sale of petroleum products. Lukoil is the second largest privately-owned oil company in the world in terms of proven hydrocarbon reserves. Lukoil's production capacities include polyethylene polypropylene. The structure of Lukoil includes one of the largest petrochemical plant in Russia - Stavrolen.
Author:Margaret Volkova
Tags:PP, PE, PP random copolymer, propylene, HDPE, ethylene, Lukoyl, Lummus Technology, Stavrolen, Bulgaria, Russia.
Category:General News
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