Tatneft started commercial production of API Group II and III base oils at its refinery in Nizhnekamsk, Russia, the company told Lube Report last week.
On Dec. 1, Tatneft produced the first marketable batches of its Euro 5 diesel fuel, kerosene and Group II/III base oil products, the production of which was made possible by the installation of a hydrocracking unit. The opening ceremony was attended by government and company officials such as Russian Prime Minister Dmitry Medvedev, Tatarstan President Rustam Minninikhanov and Tatneft head Nail Maganov.
We havent seen new base oil production [in Tatarstan] since the 1960s and 1970s. This plant is unmatched by any other base oil capacity in Russia, making it a great competitive advantage for us, Tatneft told Lube Report. It allows us to manufacture high quality products that comply with the latest environmental and operational requirements.
The key to the base oil project was construction of the heavy distillate hydrocracking unit, which can process 2.9 million tons per year of vacuum gas oil. Part of the straight-run gasoline and hydrotreated gasoil coming out of the hydrocracker is sent for further processing, including dewaxing, that transforms it into finished base oil. The plant has capacity to produce 90,000 t/y Group II base oil and 100,000 t/y Group III base oil used in production of Euro 5 specification motor oils.
Experts say that no other Russian refiner succeeded in building a unit like this hydrocracker in such a relatively short a period of time. Companies such as Lukoil, Gazprom Neft or Rosneft have been announcing development projects and upgrades for production of high quality base oils since 2008, but their realization have always been pushed back further. It looks wonderful how Tatneft succeeded in doing it in only four years time, Vladimir Kapustin, head of Moscow-based research and design institute VNIPIneft, told an industry event in Berlin last week. Tatneft announced the base oil project in 2008 but did not begin building the hydrocracker until 2010.
The plant uses wax isomerization and hydrofinishing technology licensed from Chevron Lummus Global. Its hydrogen plant uses technology licensed from Haldor Topsoe, while its project documentation, engineering development, procurement and supervision was handled by VNIPIneft, a research and design institute for the Russian oil and petrochemical industry.
The new refinery is operated by Taneco, a subsidiary engaged in operation and construction of the oil majors oil refining and chemical complexes in Nizhnekamsk, Tatarstan. Nizhnekamsk is Tatarstans second-biggest city and one of Russias largest petrochemical hubs.
The main shareholder of Tatneft is the Republic of Tatarstan. The republics government oilmen actually initiated the refinerys project, a situation uncommon for the centralized energy sector in Russia, where investments in the oil and gas sector are tightly controlled and approved by the Kremlin.
Tatneft is the main investor of the project and according to some news reports, it spent around 250 billion rubles (U.S. $4.6 billion) for construction and development of the new refinery. The combined hydrocracking unit alone cost $730 million.
The refinery can process 7 million tons of crude oil annually. The hydrocracker can produce 1.2 million t/y of Euro 5 specification diesel fuel, 500,000 t/y of aviation kerosene, and more than 600,000 t/y of straight-run gasoline and hydrotreated gasoil, part of which is allocated for production of 190,000 t/y of base oils. It can also produce liquefied gas and naphta. In terms of production capacity Tatneft is the sixth largest oil company in Russia.