Dagestan has started up its first refinery.
It is a small unit that was dismantled and transferred from the U.S. at a total cost of less than $5 million by Kvaerner Kenny Ltd., London.
Kvaerner Kenny shipped the idle 4,000 b/d capacity Silver Eagle plant from Wyoming and rebuilt it near Mahachkala, capital of Dagestan. The company finished commissioning the plant Feb. 26 and handed it over to state authorities.
The refinery was packed onto skid mounted units and shipped by sea from Galveston to St. Petersburg. There it was offloaded onto rail cars for transfer to Dagestan.
A key part of the work was incorporation of a modern control system, which included a programmable logic controller and electronic transmitter/ controllers.
Import and transportation were among the project's main hurdles, particularly the complexity of obtaining local environmental and regulatory approvals.
Paul Davies, director of Kvaerner Kenny, said while Dagestan has a long history of oil production, it had no refinery.
Under the Soviet regime, Dagestan's crude oil was sent either north to Grozny in Chechnya or south to Baku in Azerbaijan for refining. Products were then returned for local consumption.
Davies said the war in Chechnya and independence in Azerbaijan have curtailed Dagestan's access to imported products. Hence the wish to have refining capacity of its own.
Kvaerner Kenny said the refinery will produce gasoline, diesel, naphtha, and heavy fuel oil. The port at Mahachkala also affords access to products from other countries around the Caspian Sea.
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