Lukoil Starts Building USD 1.5 B Hydrocracking Plant in Bulgaria

Industry | May 31, 2012, Thursday // 16:03|  views

Bulgarian PM Borisov and Lukoil President Alekpetrov (middle) launched the building of Lukoil's hydrocracking plant in Burgas. Photo by

The Lukoil Neftochim Refinery in Bulgaria's Burgas, a subsidiary of the Russian energy giant, and the Bulgarian government broke the ground of a USD 1,5 B hydrocracking catalyst installation that will process petroleum waste.

The construction phase of the project will create over 3 000 jobs, declared Burgas Mayor Dimitar Nikolov during the ground-breaking ceremony, which was attended by Bulgarian Prime Minister Boyko Borisov, Deputy PM and Finance Minister Simeon Djankov, and Lukoil President Vagit Alekpetrov.

"Bulgarian subcontractors will be hired for some of the construction works," Lukoil chief Alekpetrov assured at the start of the construction that he launched together with Bulgarian Prime Minister Borisov.

The USD 1.5 B investment in Bulgaria is 10% of Russia company Lukoil's global projected investments for the next 10 years.

In January 2012, Lukoil Neftochim Burgas and Italian company Technip signed Wednesday a contract worth EUR 950 M for the construction of the hydrocracking facility in the Bulgarian Black Sea city of Burgas in the presence of Lukoil's First Vice President Vladimir Nekrasov, Lukoil Bulgaria CEO Valentin Zlatev, Bulgaria's Deputy PM and Finance Minister Simeon Djankov, and Burgas Mayor Dimitar Nikolov.

The Lukoil Bulgaria hydrocracking plant will be the tenth in the world, and the largest one in Eastern Europe, with only nine similar facilities existing in the world, located in the USA, Mexico, Canada, Poland, Japan, and Kuwait.

The Lukoil Neftochim refinery is to launch the hydrocracking facility in 37 months; the construction phase is to open 3 000 jobs in the Burgas region in construction, transport, logistics, and machine-building.

Once completed, the new installation is going to reduce substantially the refinery's output of greenhouse gases, and will replace existing waste processing installations using older technology.

Since January 2012, Bulgarian Finance Minister and Deputy PM Djankov has demonstrated support for Lukoil's investment plans in Bulgaria, regardless of the the Lukoil vs. Bulgarian Customs saga, which started in July 2011.

Lukoil's tax warehouse operator permits for the Neftochim refinery and the Rosenets oil terminal were revoked by the Customs Agency on July 22 after it failed to observe the June 26, 2011 statutory deadline for the installation of electronic devices reporting incoming and outgoing volumes to the National Revenue Agency (NRA).

On January 16, 2012, the Customs Agency said in a statement that the Lukoil Neftochim refinery had been awarded protocols certifying the compliance of its measuring equipment with the statutory requirements.

Many have suspected that the 2011 conflict between the Bulgarian government of Prime Minister Boyko Borisov and Lukoil Bulgaria was faked to boost support for Borisov.

The Lukoil Neftochim Burgas refinery itself is the largest corporate taxpayer in Bulgaria and makes up 10% of the Bulgarian GDP.

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Tags: hydrocracking, Burgas, Lukoil Bulgaria, Lukoil Neftochim, Lukoil Neftohim, Lukoil Neftochim Burgas, technip, Vladimir Nekrasov, Valentin Zlatev, finance minister, Simeon Djankov, Economy Minister, Burgas Mayor, Dimitar Nikolov, Boyko Borisov, Prime Minister, Vagit Alekperov, Lukoil President


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