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SOFIA (Bulgaria), October 10 (SeeNews) – Russia's Lukoil said on Friday it plans to invest $1.2 billion (879.4 million euro) in its Bulgarian oil refinery until 2014 to upgrade the plant and boost the fuel quality.
“Investments will start in 2009, around 200 million [U.S. dollars] per year, and by doing this we hope to complete the thorough modernisation of the Lukoil Neftochim plant by 2014,” Lukoil CEO Vagit Alekperov said in an interview for Burgas-based Chernomorski Far daily, faxed to SeeNews by the press office of Lukoil Neftochim.
The refinery, located in the city of Burgas, on the Black Sea coast, will become a powerful plant in terms of both technology and ecology in the Mediterranean and the Black Sea basins, he added.
The Russian company, 20%-owned by U.S. oil major ConocoPhillips, has announced plans to invest $25 billion in refining and retail over the next decade, excluding acquisitions.
Lukoil is currently investing in two large hydrocrackers in Neftochim that would help the refinery meet the higher Euro 5 motor fuel standards of the European Union, Alekperov said, but did not elaborate. Hydrocrackers are chemical reactors for fracturing large hydrocarbon molecules and hence enhancing the quality of fuels.
Lukoil, which is the second-largest oil producer in Russia with a share of some 20%, said last year it has frozen its plans to build an oil refinery in Turkey and would focus on expanding its refinery in Bulgaria instead. The company said last year it planned to increase Neftochim's oil processing capacity by 2.5 million tonnes to 10 million tonnes per year but gave no timeframe.
In 2005, the Russian oil giant unveiled plans to invest $750 million in raising the effective capacity of its Bulgarian refinery to 7.5 million tonnes of crude oil a year from five million tonnes, and another $250 million in fuel retail network in Bulgaria by 2011.
Lukoil said that it would use Neftochim to supply its 693 filling stations it acquired recently under a deal with Turkish fuel distributor Akpet, which secured a 5.0% share of the Russian company in Turkey's oil product retail market.
In November, Lukoil will discuss a three-year development programme in which three scenarios will be considered with world oil prices of $105 per barrel, $90 and $80, respectively, Alekperov said in the interview.
($ = 0.7329 euro)
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