Good Prospects for Russias PAOs

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The production of PAOs in Russia could resume by 2014 once a major petrochemical company completes recently authorized modernization to its alpha olefin facility in Nizhnekamsk, Tatarstan.

Nizhnekamskneftekhim recently sealed a deal with the German engineering company Linde Group to convert the plant to Alpha-Sablin linear alpha olefin technology. Previously, the plant produced alpha olefins through pyrolysis of naphtha.

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The modernization was greeted with cautious optimism at Tatneft-Nizhnekamskneftekhim-Oil (TNO), a 70-30 joint venture between Tatneft, an oil major based in Tatarstan, which is partly owned by its government, and Nizhnekamskneftekhim, which is owned by the investor group TAIF. Neither company would comment on financial terms related to the project.

It gives a hope that soon we can resume our [API] Group IV base oil production, Gabbas Ilyasov, TNOs deputy director for development, told Lube Report Monday about the upgrades at the Nizhnekamskneftekhim plant.

Nizhnekamskneftekhim halted its alpha olefin production in 2010, prompting TNO early last year to halt production of PAOs, which are classified as Group IV base stocks. The alpha olefin deficit was preceded by a row over ethane gas supply with the state energy giant Gazprom that started in 2007, in a combination with other ethylene supply shortages.

TNO’s 10,000 tons per year Group IV base oil plant became operational in 2003, and it is the only PAO production facility in Russia. Nizhnekamskneftekhim is scheduled to resume streaming alpha olefins by the third quarter of 2014, Ilyasov said.

After its alpha olefin plant modernization, Nizhnekamskneftekhim will be able to produce butane and hexane feedstock, used to manufacture other chemical products. Decene, a linear alpha olefin which is used as a feedstock for making PAOs, is a secondary product.

Nizhnekamskneftekhim produces polyethylene, synthetic rubber, and other chemical products. TNO uses the decene alpha olefin feedstock of its parent to produce PAOs.

The biggest producers of ethylene, polyethylene and alpha olefins in Russia are based in the republics of Tatarstan and Bashkortostan. Nizhnekamsk, the second largest city in Tatarstan, is one of the biggest petrochemical centers in Russia. Nizhnekamskneftekhim is one of the worlds biggest producers of synthetic rubbers. It is also the biggest producer of plastic in Russia.

In 2011, TNO started an expansion project for developing a 60,000 t/y lubes blending facility. Tatnefts daughter company TANECO is working on a 190,000 t/y Group III base oil plant project in Nizhnekamsk, which is planned to go online in 2013.

The Munich, Germany-based Linde Group is a major engineering company for hydrogen and synthesis gas, oxygen and olefins production development, as well as development for natural gas treatment. It is also among the Europes biggest technical gases suppliers. The Linde Group has over 600 affiliated companies in more than 100 countries.

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