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TNK Opens Refinery In Nizhnevartovsk




NIZHNEVARTOVSK, West Siberia -- Tyumen Oil Co. on Thursday launched a new refinery with a production capacity of 1.2 million metric tons of light oil products per annum.


The facility here will start full-scale operation in January, officials from Tyumen Oil Co., or TNK, said.


Based in the oil town of Nizhnevartovsk, the $18 million refinery will be operated by fully controlled TNK subsidiary Nizhnevartovsk Oil Processing Venture, or NNPO.


Over the course of 2000, NNPO will refine 4 million tons of crude from TNK producers, NNPO director Andrei Popov said Thursday.


The refinery will produce 60,000 tons of gasoline, 30,000 tons of diesel and 12,000 tons of kerosene per month, TNK project supervisor Andrei Bulkatov said. The oil products will be mostly sold locally via TNK retail unit Tyumennefteprodukt.


"Local fuel prices will possibly decline because we will save on transport costs by processing our own crude," Popov said.


Previously the region's fuel came from either Sibneft's Omsk or TNK's Ryazan refineries.


Filling stations sell 92-octane and 76-octane gasoline for 6.9 rubles (26 cents) a liter and 5.8 rubles (22 cents) per liter, respectively, in Nizhnevartovsk; diesel goes for 4.3 rubles (16 cents) per liter.


The primary processing equipment was installed by the Volgograd-based engineering firm Neftezavodmontazh. TNK says it plans to upgrade the refinery in the near future, according to TNK president Simon Kukes.


TNK has focused its long-term strategy on developing the giant Samotlor oil field on which Nizhnevartovsk is sited. The firm recently won a bitter battle with oil holding Sidanko and its leading foreign investor, BP Amoco, over former Sidanko production subsidiary Chernogorneft f which shares the Samotlor field with TNK subsidiary Nizhnevartovskneftegaz.


Kukes flew to the United States later Thursday for talks with U.S. Export-Import Bank representatives on $500 million in proposed banking guarantees to back two pet TNK projects f one to develop Samotlor further and one to upgrade the firm's Ryazan refinery.


"On Friday or Monday the bank will say either yes or no [to the possible guarantees], " Kukes said.


TNK had earlier said that it did not expect Ex-Im Bank to approve the guarantees before year's end due to the outcry from Sidanko shareholder BP Amoco over TNK's acquisition of both Chernogorneft and fellow Sidanko subsidiary Kondpetroleum.


BP Amoco has accused TNK of unfairly acquiring the two subsidiaries by manipulating Russian bankruptcy law and the Russian court system. Sidanko has been undergoing insolvency proceedings since early this year.


To fund its development plans, TNK is also seeking to secure a further untied $200 million loan from ABB Structured Finance investment bank, Germany's Commerzbank and engineering firm Halliburton financial services, Kukes said.


TNK does not support the idea of creating a state oil company, the firm's president, Simon Kukes, said Thursday.


He will recommend to TNK shareholders that they vote to participate in the planned sale of a 25 percent plus one share stake in Rosneft next year. "This purchase will take us out of Khanty-Mansiisk [autonomous region] and give us international authority," he said.


TNK is also interested in the proposed sale of a 19.68 percent stake in Slavneft. Slavneft's Belarus-based refinery, close to the CIS border, "is interesting during restrictions on exports of oil products" Kukes said.


TNK is not interested in the possible privatization of minor state oil asset Onako, he added.

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