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1 June 2017

Modernization of Belarusian oil refineries to end in 2019

MINSK, 1 June (BelTA) – The modernization of Belarusian oil refineries will be finished in 2019. The deadline was set as a result of the government conference called by the head of state on 1 June to discuss the strategy for developing the Belarusian oil processing industry, BelTA learned from Igor Lyashenko, Chairman of the Belarusian state petrochemical concern Belneftekhim.

The implementation of investment projects at the Naftan oil refinery and Mozyr Oil Refinery was discussed in detail during the conference. The head of state was informed about the present difficult market situation. According to Igor Lyashenko, the market is overloaded with oil and oil products. All these factors reduce the profit margin. The Belarusian oil refineries have to overcome these complicated conditions to find money for investment projects. The projects are supposed to be finished in 2019. Considerable sums will be required for it. One refinery will need over $500 million while the other one will need over $700 million, said Igor Lyashenko.

Speaking about sources of finance, the Belneftekhim head said that resources of the oil refineries will be used in addition to loans. Chinese loans may be used to implement investment projects at the Belarusian oil refineries. The available options were discussed during a recent visit of Belarus President Alexander Lukashenko to China. “They will definitely be interesting for us, provided the terms are affordable,” said Igor Lyashenko.

According to the Belneftekhim head, during the government conference the head of state pointed out that the companies should work effectively and should cut costs, including administrative ones. More attention should also be paid to the quality of construction work, acceptance and installation of equipment.

“All the i’s have been dotted, deadlines have been set,” stressed Igor Lyashenko.

The medium-term development strategy of the Belarusian oil processing industry will bear in mind the market situation. “In the medium term we have to finish investment projects at both refineries. It will increase the output of light oil products and the crude oil upgrading index. It will bring about a more stable financial situation and will expand horizons as far as sales of oil products are concerned,” noted the Belneftekhim head.

As for long-term prospects, the oil market situation will depend on changes in other branches of the production sector, including automobile engineering. “We see certain trends. The world statistics indicates that in 4-5 years we will feel the decrease in consumption of oil products. This is why the companies are busy working out long-term investment projects, which will allow diversifying the business away from traditional diesel fuel and gasoline towards petrochemistry,” said Igor Lyashenko.

Speaking about the overall effectiveness of the industry, the Belneftekhim head noted that they intend to hit all the targets set by the government for H1 2017. “If the global markets remain as they are, we don’t think we will miss any performance targets this year,” he stated.

Alexander Lukashenko was also informed about the investment projects the chemical company Mogilevkhimvolokno, the tire manufacturer Belshina, and the chemical company Grodno Azot are implementing. “Close attention was paid to Grodno Azot’s project. We intend to launch a large investment project to build a new nitrogen facility,” said Igor Lyashenko.

Heads of Belarusian oil processing companies also talked about modernization plans. In 2016 Mozyr Oil Refinery commissioned five production facilities worth a total of $480 million. “The gradual retooling process as per the company’s development concept has allowed enabling certain favorable conditions for implementing such a large investment project as the facility for hydrocracking black oil. The project is in the active implementation stage,” said Mozyr Oil Refinery Director General Vitaly Pavlov.

The executive specified that the black oil hydrocracking facility comprises three installations: a black oil hydrocracking plant, a hydrogen manufacturing plant, and a sulfur manufacturing plant in addition to 21 secondary installations.

In turn, a delayed coking complex is the main project for the Naftan oil refinery, noted the company’s director Alexander Demidov.

The implementation of these investment projects and the completion of the retooling campaign will allow increasing the crude oil upgrading index to 90%. The Belarusian oil refineries will be able to process oil effectively and at a profit. In turn, their operation will favorably affect the national economy as a whole.

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