LUKOIL Neftochim Burgas - History

History

On 12 October 1999 LUKOIL acquired 58% of Neftochim Burgas for $101 million in what would later be labeled the privatisation deal of the year in Bulgaria. LUKOIL also agreed to invest a further $408 million until 2005.

October 12, 1999 The LUKOIL Company bought 58% of the shares of Neftochim and for over 10 years LUKOIL Neftochim Burgas AD has been a part of the organizations in LUKOIL Group. The moment it took over the refinery LUKOIL initiated aggressive activities dedicated to modernization and intensification of capacities presumed within 5-7 years to adapt to the upcoming severe requirements of the European Union addressed to quality of motor fuels – Euro-III, Euro-IV and Euro-V. For the period until 2010 LUKOIL has invested in the refinery in Burgas over 1 billion US dollars in reconstruction and revamp of existing units and construction of new ones. In the period 2002-2006 was completed reconstruction and intensification of two of the key refinery units – capacity enhancement from 400 000 ton per year to 600 000t/year and installation of additional reactor for continuous catalyst regeneration of Catalytic Reforming unit, as well as increased capacity from 1.5 million ton a year to 2.0 million t/year and integration of mild hydrocracking process of Catalytic Cracker Unit. A new modern Claus process unit was built with capacity of 30 000ton/year which provides full recovery of hydrogen sulphide generated in the production processes.

In the period 2006-2009 was carried out reconstruction and intensification to two of the major units for diesel fuel Hydrodesulphurization – Hydrotreating unit-2 and Hydrotreating Unit-3 combined with installation of new modern reactor units, state-of-the-art catalysts, and systems for automatic control of technological process. Large-scale reconstruction was carried out to one of the Atmospheric vacuum distillation units for crude processing AVD-1 – replacement of main static and dynamic equipment, construction of new modern process heaters, waste heat boiler and control systems, as well as intensification from 3.0 million tons per year to 4.0 million tons per year. Completed was construction and commissioning of new Sulfuric Acid Alkylation Unit with processing capacity of 300 000 tons per year in parallel with decommissioning of the old, deemed no longer efficient alkylation unit which was in operation since 1983. New facilities for treatment of production process solid waste have been constructed and commissioned, as well as local effluent treatment plant at Rossenetz Oil Terminal. The implementation of these units ensures complete recovery of process waste and quality of discharged water in compliance with the European legislation. In this period the Company constructed and commissioned newly built and automated Tank Truck Filling Terminal for motor gasoline and diesel fuels, as well as jet fuel. The technology is implemented in compliance with regulated by law bottom loading, equipped with latest coupling devices for fuel filling and includes automatic vapor recovery system, which achieves reduction of emissions of volatile organic compounds to atmosphere three times more than the European requirements. The refinery flare system has also undergone reconstruction: It has been furnished with new and modern flare candles to provide smoke-free and complete combustion, as well as improved dispersion, resulting to minimized impact on ambient air in the adjacent towns and villages.

In 2010 completed the construction activities and were commissioned three new processing units to deliver output in compliance with the latest European standard Euro-5 – Hydrotreatment of Diesel fuel HDS-5 of processing capacity 1.7 million tons per year, Hydrodesulphurization of diesel HDA-1 of processing capacity 1.1 million tons per year and Regeneration of Methyldiethanolamine of processing capacity 0.4 million ton per year. A revamp was also carried out at the atmospheric diesel units AD-4, vacuum distillation of oil residue VDM-2, where in addition to the renovation of main equipment was performed a replacement of the outdated technological process control systems with state-of-the-art systems. The system for hydrogen production and distribution underwent major upgrading and a new and modern compressor station was installed. A process unit was built for purification of micro contaminants in propane-propylene fraction from Catalytic Cracker Unit up to polymerization purity. General renovation and subsequent commissioning to continuous operation mode was carried out at Cooling Tower №9. All revamped and newly built process units have been introduced to the Central Control Room which possesses modern network infrastructure with double backup of control and which is furnished with systems for reliable and safe controlling of technological processes. At present moment the control of 90% of the process units is executed through the Central control room.

As a result of these substantial investments made by the Company of LUKOIL and addressed to overall renovation and upgrading of production units, as well as introduction of most modern management approach, LUKOIL Neftochim Burgas today is a modern oil refining plant, operating in compliance with leading international standards. In the next few years LUKOIL is planning construction of an ultra-modern refining complex for deep processing of vacuum residue with capacity of 2.5 million t/year and investments for over US$1 billion. The new facilities will increase the depth of processing from 76% на 90% and will ensure fuel oil production with sulfur content below 1% to meet the European requirements.

The Basic Design and Front End Engineering Design (FEED) for the project have been developed. The detailed engineering of the complex is underway. The contracts have been effected and presently the manufacture of long lead equipment has commenced, thus the first equipment delivery is to take place in September 2012. This complex places LUKOIL Neftochim Burgas among only a dozen of refineries around the world possessing similar technology for ultra deep processing. The company has highly qualified engineering and process staff. LUKOIL Neftochim Burgas AD pursues the policy of the Social Code of OAO in order to incorporate company’s values addressed at keeping high standard of living, stable social guarantees, development of work environment adequate for professional growth and career evolvement for young specialists and care for the retired oil refinery workers.

As acknowledgement for the best socially addressed policy in Republic of Bulgaria comes the Company’s nomination of the award “Socially responsible company” for the year 2010 received in the contest organized by The Pari (Money) newspaper. The prize of honor was presented on 03.02.2011 by the Minister of Labor and Social Policy of Republic of Bulgaria, Totyu Mladenov.