Naftna Industrija Srbije, a subsidiary of the Russian oil major Gazprom Neft, last week announced plans for boosting its lubricants production and upgrading its base oil plant in Novi Sad, Serbia.
The U.S. $100 million modernization will enable the Novi Sad refinery to process 180,000 tons of high-quality base oils annually, Naftna Industrija Srbije (NIS) said in an Aug. 29 press release, adding that a significant amount of the output will be earmarked for export.
We have analyzed in detail not only our resource and technology base, but also the perspectives [of the base oil market], both in the region and in Europe, said NIS general director Kirill Kravchenko.
Construction is expected to start in the first half of 2013. The plant, scheduled to go online by 2015, will use Chevron Lummus Global base oil production technology. It will produce naphthenic base oils as well as API Group II paraffinic base oils, an NIS press spokesman told Lube Report.
Feedstock for the plant will come from Serbias SE Pannonian Basin Velebit oil-gas field, because the crudes physical and chemical properties make it optimal for production of naphthenic base oils, the company said.
The plant will also use heavy residues after hydrocracking from its Pancevo refinery, the second fuel refinery owned by NIS.
The new investment in the companys refining business not only revitalizes the outdated production capacities, but it is a serious step towards greater diversification, and therefore better stability and balance of NIS business operations, Kravchenko said.
At its site in Novi Sad, NIS also produces finished lubricants marketed under the Nisotek brand. It anticipates a significant increase in the volume of lubricants produced by 2020. We are expecting an increase of up to 50,000 tons of finished products annually by 2020, the company said.
NIS produces a wide range of products such as motor and industrial oils. Industrial oils and oils for special applications will be produced from naphthenic base oils, while paraffinic base oils will be mostly used for production of motor oils, Kravchenko said.
NIS is a subsidiary of the Russian oil giant Gazprom Neft, which bought a 51 percent stake of the company for $545 million in 2009. The rest of the companys shares are held by the Serbian government.
Gazprom Neft committed to invest another $675 million in NIS in the following years. The modernization of the Novi Sad refinery is part of that commitment. NIS used to have a 50,000 t/y naphthenic base oil production capacity at the Novi Sad refinery. But the plant was closed in 2009.