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Petrotahlil :Lukoil's Nizhny Novgorod refinery at Kstovo in western Russia

Leading oil and petrochemicals group Lukoil is set to proceed with the construction of a new world scale polypropylene production plant at Nizhny Novgorod in western Russia.

Moscow-based Lukoil has confirmed investment funding for a 500,000tpa PP plant to draw on propylene feedstock provided by its big Lukoil-Nizhegorodnefteorgsintez refinery at Kstovo south of the Volga region city.

Output from the planned PP unit is expected to be sold chiefly for exports, stated Lukoil’s chief executive officer Vagit Alekperov as he confirmed the project late last month, reported Russia’s TASS news agency. 

Lukoil already boosted the refinery’s production of propylene, nearly doubling its output to reach 300,000tpa through the completion of a second gas oil catalytic cracking complex at the Kstovo site in Autumn 2015. That project involved investment of more than €890m.

The company already produces polypropylene and polyethylene at two other sites in Russia and Bulgaria. At Budyonnovsk in Russia’s far south west, Lukoil’s Stavrolen complex is capable of producing 300,000tpa of PE products along with 120,000tpa of PP while its Neftohim Burgas refinery site in Bulgaria has an 80,000tpa PP capacity.

Lukoil is also understood to have plans to increase its PP production in Bulgaria to around 150,000tpa.   

The Nizhny Novgorod PP scheme is in line with a new company policy of exploiting bi- products of its gas production more to provide quality raw materials for the manufacture of plastics.    

Lukoil’s new gas strategy, in line with its policy of boosting added value production, includes potential plans for new petchems plants to produce up to 1m tpa of PE and 500,000tpa of PP, according to Rustem Gimaletdinov, its vice president of oil refining, gas processing and petrochemistry. 

With a likely fall in demand for diesel and “classic” fuels, the group needs to rebalance its product range to maximise the value gained from its growing gas production, he believes. This means petrochemicals will increasingly become the key to future growth for the company. 

Lukoil has been carrying out a wider oil refinery modernisation programme, including at the Kstovo site and is reported to be aiming to complete this by 2021. 

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