Kazakh Plant on Time Despite Dispute


Lukoil says a blending plant that it is building in Kazakhstan will still open on time early next year, despite a legal dispute between the oil company and a local contractor working on the project.

A Kazakh arbitration court ruled last month that the contractor, Shar Kurylys, must return part of the funds that Lukoil advanced for construction because of work that has not been completed. Lukoil did not indicate whether Shar Kurylys will continue working on the project or if it intends to find a replacement contractor.

Difficulties can occur during the realization of every grand-scale project, Lukoil Lubricants Central Asia General Director Andrey Matyukhov told Lube Report Monday. Any problem can be easily solved in a healthy investment climate. He added that Lukoil does consider Kazakhstan to have a healthy investment climate.

Lukoil is building a U.S. $90 million, 100,000 tons per year lubricants blending plant located in Kazakhstans Almaty region, close to the Western Europe-Western China transportation corridor.

Shar Kurylys began working on the first phase of constructing the plant in April 2016. In May of last year Lukoil requested its prepayment be returned and took the dispute to the Kazakh international arbitration court.

Lukoil Lubricants Central Asia runs the Russian oil majors lubricant business in the region and has said the plant will make lubes for markets such as Kazakhstan, Kyrgyzstan, Uzbekistan, Afghanistan, Mongolia and China.