Russia's Lukoil Pours USD 1.5 B in Hydrocracking Facility in Bulgaria

Business » ENERGY | January 25, 2012, Wednesday // 18:08
Bulgaria: Russia's Lukoil Pours USD 1.5 B in Hydrocracking Facility in Bulgaria (L-R) Burgas Mayor Dimitar Nikolov, Economy Minister Traicho Traikov, Lukoil VP Vladimir Nekrasov, Finance Minister Simeon Djankov, Lukoil Bulgaria CEO Valentin Zlatev. Photo by BGNES

The Lukoil Neftochim Refinery in Bulgaria's Burgas, a subsidiary of the Russian energy giant, has kicked off a USD 1.5 B investment in a large hydrocracking catalyst installation that will process petroleum waste.

The USD 1.5 B investment in Bulgaria is 10% of Russia company Lukoil's global projected investments for the next 10 years.

Lukoil Neftochim Burgas and Italian company Technip signed Wednesday a contract worth EUR 950 M for the construction of the hydrocracking facility.

The contract was signed in the Bulgarian Black Sea city of Burgas in the presence of Lukoil's First Vice President Vladimir Nekrasov, Lukoil Bulgaria CEO Valentin Zlatev, Bulgaria's Deputy PM and Finance Minister Simeon Djankov, Bulgarian Minister of Economy, Energy, and Tourism Traicho Traikov, and Burgas Mayor Dimitar Nikolov.

The Lukoil Bulgaria hydrocracking plant will be the tenth in the world, and the largest one in Eastern Europe, with already existing similar facilities located in the USA, Mexico, Canada, Poland, Japan, and Kuwait.

The Lukoil Neftochim refinery is to launch the hydrocracking facility in 37 months; the construction phase is to open 3 000 jobs in the Burgas region in construction, transport, logistics, and machine-building, Lukoil officials said.

Once completed, the new installation is going to reduce substantially the refinery's output of greenhouse gases, and will replace existing waste processing installations using older technology.

“The main job of our government is to attract good investors, especially in the hi-tech sphere. Today is a very nice day on which the long-term work of many people has come to a successful end,” Bulgaria's Finance Minister Simeon Djankov declared at the signing of the Lukoil Bulgaria-Technip contract, as cited by BTA.

Bulgaria's Minister of Economy, Energy, and Tourism Traicho Traikov evaluated the Lukoil hydrocracking facility project as “the largest investment in Bulgaria's new economic history”.

“The realization of this project will have the full support of the Bulgarian government,” he said.

Lukoil's First Vice President Vladimir Nekrasov has thanked the Bulgarian authorities for the favorable business climate that the company enjoys in Bulgaria.

"Our business in Bulgaria has always been a priority for us, and our investments in the past 10 years have proven that,” Nekrasov added.

Bulgarian government ministers Djankov and Traikov demonstrated support for Lukoil a day after the formal end of the Lukoil vs. Bulgarian Customs saga, which started in July 2011.

Lukoil's tax warehouse operator permits for the Neftochim refinery and the Rosenets oil terminal were revoked by the Customs Agency on July 22 after it failed to observe the June 26, 2011 statutory deadline for the installation of electronic devices reporting incoming and outgoing volumes to the National Revenue Agency (NRA).

On January 16, 2012, the Customs Agency said in a statement that the Lukoil Neftochim refinery had been awarded protocols certifying the compliance of its measuring equipment with the statutory requirements.

Many have suspected that the 2011 conflict between the Bulgarian government of Prime Minister Boyko Borisov and Lukoil Bulgaria was faked to boost support for Borisov; the Lukoil Neftochim Burgas refinery itself is the largest corporate taxpayer in Bulgaria and makes up 10% of the Bulgarian GDP.

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Tags: hydrocracking, Burgas, Lukoil Bulgaria, Lukoil Neftochim, Lukoil Neftohim, Lukoil Neftochim Burgas, technip, Vladimir Nekrasov, Valentin Zlatev, finance minister, Simeon Djankov, Economy Minister, Traicho Traikov, Burgas Mayor, Dimitar Nikolov.

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