Russia’s second largest oil company, PJSC Lukoil, has opened the country’s largest vacuum gasoil (VGO) hydrocracking facility at its wholly owned oil refinery OOO “LUKOIL-Volgogradneftepererabotka.” The annual capacity of the VGO Deep Conversion Complex is 3.5 million tonnes. The Volgograd refinery has an annual capacity of 14.5 million tonnes.
The USD 2.2 billion project will help improve Lukoil’s overall fuel quality and will help boost its annual output of Euro 5-compliant diesel fuel by 1.8 million tonnes, motor gasoline components by 0.6 million tonnes, and liquefied gases by 0.1 million tonnes.
VGO is mostly used as feedstock to produce diesel fuel and gasoline. These products will be marketed primarily in southern Russia. Until now, Lukoil exported all the VGO produced at the Volgograd refinery via the Black Sea port of Novorossiisk.
The complex, which also has hydrogen and elemental sulfur production units and auxiliary facilities, was completed within three years. The VGO Deep Conversion Complex was designed by OOO “LUKOIL-Nizhegorodniinefteproyekt” and was constructed by Russian and foreign contractors.
Commissioning of the complex in Volgograd makes Lukoil the first Russian company to fulfill its commitment under a quadripartite agreement between oil companies, RF Federal Antimonopoly Service, Federal Service for Environmental, Technological and Nuclear Supervision (Rostechnadzor) and Federal Agency for Technical Regulating and Metrology (Rosstandart).
The companies pledged to install 130 new facilities by 2020 that will enable Russia to increase production of higher margin lighter products.
The ceremony was attended by the Head of the Government of the Russian Federation Dmitry Medvedev, Deputy Head of the RF Government Arkadiy Dvorkovich, RF Minister of Energy Alexandr Novak, Envoy of the RF President to the Southern Federal District Vladimir Ustinov, Governor of the Volgograd Oblast Andrey Bocharov and President of PJSC Lukoil Vagit Alekperov.