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  Media Office of the President of Tatarstan,  

Tatarstan Implements New Heavy Oil Residue Conversion Technology

  A heavy residue conversion complex based on a leading-edge VCC technology will be built at TAIF-NKs Refinery in 2015. The Basic Engineering Contract for construction of an over 3 MTA unit was signed today by TAIF-NK PSC and an American engineering company KBR in Kazan. The document was signed by Tim Challand, First President, member of KBR Board of Directors and Amil Kalimullin, General Direcor, TAIF-NK PSC at the presence of Rustam Minnikhanov, the President of the Republic of Tatarstan.

A new unit will operate based on the licensed Veba combi cracker process, which exceeds all the known heavy residue conversion technologies in terms of profit generation 2-2.5 times. The units feedstock capacity will be 2.7 MTA for bitumen and up to 0.7 MTA for vacuum gasoil. Thus, the new unit will make it possible to convert all the heavy residues from oil refining at TAIF-NK into light petroleum products. Currently, the yield of fuel oil at TAIF-NK makes up approximately 28-29% - over 2 MTA. After start-up of the new unit scheduled for 2015, the refinery will be able to process 7.3 million tons of locally produced oil and yield 7.1 million tons of high-quality petroleum products. The refinerys total profit margin will rise 1.7-2 times. The cost of the project is USD 1.5 billion based on preliminary estimates. According to Albert Shigabutdinov, General Director,TAIF PSC, 15% of the projects cost will be the companys equity, and 85% - funds borrowed from banks. The projects pay-back period will be 3 years since the units start-up.

 According to the information announced today during the project presentation, TAIF-NK became just a third company to acquire a VCC license two Chinese large oil corporations signed VCC engineering and construction contracts with KBR during past one and a half years. At the same time, according to Tim Challand, First President, member of KBR Board of Directors, even now more than 30 customers over the world are interested in this project. In particular, this is an Indian company Reliance owning the world largest refinery in Jamnagar.

The technology itself was developed as early as in the middle of the past century. It was applied in Germany during the World War II in order to obtain oil products from coal but in peace time it became unprofitable due to low crude prices. Only in the recent years KBR and BP improved this technology by adapting it to heavy residues, bitumen and heavy oils. 

According to Tim Challand, Tatarstan has a big potential to use the VCC technology as the republic possesses enormous reserves of heavy crude , which is used as feedstock in this technology.

The President of Tatarstan Rustam Minnikhanov underlined that a heavy residue conversion project is entirely compliant with an idea to increase crude oil conversion depth announced by the government. Current taxation system stimulates enterprises to raise crude oil conversion depth. And the entire Russia has to work a lot in this direction, R. Minnikhanov said. The head of the republic mentioned that TAIF was seeking for suitable heavy residue conversion technologies for 5-6 years. Today we faced up basic engineering stage, and I am confident we will manage to implement the project within 3-4 years, the President of Tatarstan said.

He did not preclude the use of VCC technology also by other refining projects in Tatarstan for heavy residue conversion at TANEKO site and bitumen oil refining. According to Rustam Minnikhanov, TAIF-NKs project should be illustrative both for Tatarstan and for KBR company by demonstrating the advantages of a new technology. The President of Tatarstan congratulated the partners on signing of the contract and expressed his confidence in successful implementation of this leading-edge technology.


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