Gazprom Neft starts construction of deep conversion unit at Serbia's Pancevo

With capacity of 2,000 tonnes per day, commissioning the facility will allow conversion rate — a key indicator of a refinery’s operational efficiency — to reach 99.2%, while the volume of high-quality diesel fuel will increase by more than 38%, Gazprom Neft said in a statement.

As part of the project, NIS will start production of petroleum coke, which is currently not produced in Serbia, and once the DCC becomes operational, the company will cease the production of high-sulphur fuel oil, which will result in improved environmental performance, enabling Serbia to meet its international obligations in limiting the use of high-sulphur fuels, Gazprom Neft said.

"Modernising the oil refining complex is a key strategic objective for us, on the successful implementation of which the overall efficiency of our business largely depends. Under the unstable conditions of today’s energy market, this is becoming a key factor in competitiveness," the CEO of Gazprom Neft, Alexander Dyukov, said in the statement.

The project is a key part of the second phase of a major programme which Gazprom Neft has been executing since 2009 to modernise the refining capacity at NIS. The construction of the DCC unit is expected to be completed in 2019, Gazprom Neft said.

NIS completed the first phase of modernising its Pancevo refinery in 2012 when it built a light MHT/DHT hydrocracking and hydrotreating complex, allowing the plant to commence production of Euro-5 fuel.

Gazprom Neft controls a 56.15% stake in the capital of NIS, while the Serbian government owns a 29.87% shareholding interest.