Kazakhstan advances refinery modernization program

Kazakhstan’s state-owned KazMunaiGas (KMG) has secured financing from the Development Bank of Kazakhstan JSC (DBK) for the continuing modernization of its 6-million tonne/year (tpy) Pavlodar refining and petrochemical complex.

DBK will provide about 25% of the more than $1.2 billion total cost of the modernization project in the form of credit for a period of up to 10 years, the bank said.

The remaining 75% of Pavlodar’s revitalization cost has been financed mainly by club-deal loans from Japanese banks, DBK said.

In addition to improving the quality of the refinery’s gasoline and diesel production slate to conform to the Eurasian Economic Commission’s (EEC) technical specifications for K4 and K5 emission classes—which are equivalent to Euro 4 and Euro 5 environmental standards—the Pavlodar modernization project will also boost the plant’s crude processing capacity to 7 million tpy.

While the Pavlodar refinery initially was designed to process a West-Siberian blend of crude oil, the modernization overall, once completed, will equip the complex to process as much as 5 million tpy of crude oil from Kazakhstan as well, DBK said.

A first phase of the modernization project consisting of two processing units is scheduled to be commissioned by Jan. 1, 2016, at which time the refinery will be able to produce K4-standard fuels.

Remaining work related to the refinery’s overhaul is scheduled to be completed in 2017, the bank said.

Specifically, the Pavlodar modernization program involves the revamp of ten of the plant’s units, including its crude distillation unit, vacuum distillation unit, kero-hydrotreater, diesel hydrotreater, Merox unit, naphta hydrotreater, vacuum gas oil unit, FCC unit, catalytic reforming unit, as well as utilities, and offsites (OGJ Online, Oct. 30, 2014).

New installations to be built as part of the project include a Penex isomerisation unit, sulfur recovery unit, sour water stripper, amine regeneration unit, and diesel hydrotreating and dewaxing units.

Atyrau modernization progresses

Separately, the first stage of a $2.9 billion revamp at KMG’s 104,000-b/d Atyrau refinery is nearing completion, according to DBK, which provided 45% of financing for the project.

A timeframe for the project’s first-phase completion, however, was not disclosed.

As of May 2014, a second phase of reconstruction and modernization of Atyrau that involves construction of a deep oil conversion complex at the site still was awaiting full financial backing (OGJ Online, May 28, 2014).

KMG has said it aimed to complete modernization projects initiated in 2012 at its three refineries in Kazakhstan by Jan. 1, 2016, as part of the Program for Development of Republic of Kazakhstan’s Oil and Gas Sector for 2010-14, which aims to boost the country’s overall crude distillation capacity to 18.5 million tpy as well as improve the quality of production yields.