LONDON — Tatneft will start output in October at the nation’s first new major refinery since the collapse of the Soviet Union, the project’s general director Khamza Bagmanov said Monday.
Tatneft is spending about $4.9 billion on the first phase of the 140,000-barrel-a-day plant. It’s also studying plans to double the refinery’s capacity in the future, bringing total investment to 280 billion rubles ($9.3 billion).
The company has been developing the project, called Taneco, since 2005 after then-President Vladimir Putin called for an increase in domestic refining capacity. The plant will be able to process high-sulfur crude, reducing the quantity of sulfur in Russia’s oil export blend and improving its quality.
Tatneft owns 91 percent of the project, while Svyazinvestneftekhim, a Tatarstan state investor, holds the rest. Fluor, the largest publicly traded U.S. engineering company, is assisting Taneco in managing the venture.
The refinery will initially produce fuel oil, furnace oil, vacuum gas oil, naphtha and kerosene. In December, Tatneft approved construction of a hydrocracker capable of processing 2.9 million metric tons of vacuum gas oil a year into gasoline.
The Almetyevsk-based company expects the hydrocracker and hydrotreaters, which remove sulfur and raise production of higher-grade fuel, to be completed next year.
In its first phase of operation, the refinery will have an annual output capacity of 2.4 million tons of fuel oil, which may be processed into other products; 1.8 million tons of Euro-5 standard diesel; 940,000 tons of jet fuel; 450,000 tons of gasoline; 400,000 tons of naphtha; and residues for production of petrochemicals and lubricants.
In 2007, Taneco raised $2 billion in loans, guaranteed by Tatneft and arranged by BNP Paribas and other banks, to fund construction. In November, Tatneft obtained a $1.5 billion loan from WestLB, UniCredit and other lenders.
The oil company has been upgrading a diesel pipeline to pump 2.4 million tons of the fuel a year from Taneco to a pipe in Kstovo for possible export through the Baltic Sea port of Primorsk. In December, Tatneft completed a stretch of pipe to supply crude to the refinery.