Russia’s Lukoil Plans $1.0 Bln Investment in Hydrocracking Unit in Its Bulgarian Refinery

“We have already launched this capital investment. The base project has been drafted and the equipment, which needs a longer manufacturing period, has been ordered,” Nekrasov told Bulgarian daily Trud (www.trud.bg) in an interview.

He said Lukoil will repair and upgrade the petrochemical production at the refinery located in Burgas, on the Black Sea coast, and will develop its network of filling stations across Bulgaria which is priority market for the group under its 2009-2019 development strategy. The group will invest $250 million in the refinery and $22 million in filling stations next year.

The Lukoil Neftochim Burgas refinery will shut down for a 40-day maintenance in February to connect two new desulphurisation units worth $300 million which will allow it produce fuels meeting the Euro 5 standard. The shutdown will not affect supplies to the market and after the halt the refinery will be able to operate without any scheduled breaks in the next five years, Nekrasov said.

Lukoil Neftochim Burgas, which is the only operational oil refinery in Bulgaria, meets about 80% of the country's motor fuels needs and exports about a third of its output.

In 2005, Lukoil unveiled plans to invest $750 million in raising the processing capacity of Neftochim 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. Last year, the refinery processed 7.116 million tonnes of crude oil, compared to a planned 7.083 million tonnes. In 2007 it processed 7.063 million tonnes of crude oil.

Commenting on global oil prices, Nekrasov said a price of $80-$90 per barrel is “fair”.

 “At this price we can work efficiently and fulfil strategic programmes,” he said in the interview.

Current international oil prices are $75 per barrel.

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