PETROTEL-LUKOIL, USD 120 MILLION INVESTMENTS IN ENVIRONMENT PROTECTION INTERVIEW WITH ANDREY BOGDANOV, GENERAL MANAGER

Continuing the series of interviews with managers of the major players in the refining sector, we talk with Mr. Andrey Bogdanov, General Manager of PETROTEL-LUKOIL REFINERY, about the investments carried out during 2011-2014, about the equipment modernization and the benefits both economic and in terms of environment.

Lukoil instalatie1Petroleum Industry Review: Mr. Andrey Bogdanov, you have been appointed as the General Manager of PETROTEL-LUKOIL in the summer of 2011. What was the refinery’s situation at the time and what important steps have marked its course so far?

Andrey BogdanovIn terms of processes, PETROTEL-LUKOIL REFINERY is a good refinery! I found here a professional team, ready to work and a place where there’s always room for improvement on the technical side – something that our company, Lukoil, does systematically in all its refineries!

I am a dedicated person to process field and I know very well what I have to do. My efforts were directed towards production, therefore, towards reliability, technical safety, and to achieving our corporate strategy in Romania on using the best technology in the field, with a direct impact on reducing polluting emissions from specific sources and to improve air quality in the refinery’s influence area.

The aim of the modernization has been targeted towards the quality of our products, in maximum industrial, environmental security and based on a higher energy efficiency. The fact that the city gradually expanded closer to refinery, that we operate now within a community, led us to having as priority the maintaining of an environment as close to its natural condition, by investing in projects that have this benefit - projects the refinery has developed with internationally recognized technologies. I strongly believe that each refinery on earth should have the following priorities: Operational Safety, both on the Labour Safety and Health – Emergency Situations (SSM-SU) and in Ecology, whereas profit always comes after achieving these goals!

When I arrived to our refinery in Romania, I wanted our employees to understand that we shouldn’t expect someone to come and do something, but we are our own masters, accountable for how we do our work! Without any exaggeration, the equipment mean nothing without people, and this time it is we who can turn things into the right direction. I want this refinery to become one of the top Lukoil refineries, to have in mind only efficiency and positive results, but this depends on the people here. For most of us, the refinery is a second home, we spend more time here than anywhere else; my view is that when leaving refinery to get home, we should fully enjoy our families, our children and all our achievements!

In the first half of 2011, investments of USD 4.24 million targeted PETROTEL-LUKOIL, the main share had the investments on commercial and environmental issues; total investments throughout 2011 amounted to USD 16 million.

Among the investments with ecological character I recall ‘Burning optimization in ovens’ and ‘Modernization of underground water supply networks’, ‘Modernization of purge’ and ‘Systemization, washing and optimizing the fuel gas system.’ These measures were included in the Action Plan of the Integrated Environment Authorisation. The 2011 commercial investments focussed, besides on the commercial effect, also on reduction the production processes energy consumption and the sulphur content in the finished products meant to reach the market. Among the investments in 2011 I may include as relevant: ‘Reducing the propylene sulphur content’, ‘The programme for increasing the FCC equipment and the reformer’s energy efficiency’.

An important investment with ecological objectives which started in 2010 and continued during the new investment program in 2011 was the ‘Optimizing the absorption-desorption of amines process’ from the gas sweetening plant. Of course, these are few steps that contributed to the growth of the technological equipment indicators with beneficial impact on the environment, the significant decrease in technological losses, reduced emissions of volatile organic compounds, reduced level of polluted water entering the purge treatment station. We also managed to reduce greenhouse emissions by 6%, to produce products in line with European standards and to improve the issues related to industrial safety and environmental and energy efficiency. During 2011-2014 investments totalled about USD 85 million.

PIR: What was the modernization programme about and what investments have been carried out in this regard?

Andrey Bogdanov: The reconstruction of technological equipment has been directed to produce fuels (petrol and diesel) in accordance with applicable standards and for the increase of energetic efficiency.

One of the major factors of success was the refinery’s environmental policy - a strategic element of the overall system for managing all processes and first of all production processes.

In this regard, during 2012-2015, investment projects on the modernization of the treatment plant, of the water supply underground pipeline system, of the catalytic cracking block regeneration were carried out. A special project was to build the facilities to reduce air emissions from the catalytic cracking unit. The project ‘Optimizing steam consumption by moving from three to two types of steam’ was also carried out. No less important was the modernization of the LPG recovery gas obtained in the catalytic cracking process. Currently, the processing depth is 99.5%. Among other projects dedicated to environment, there is also the finalization of the groundwater cleaning project which was completed in accordance with the best international practices. Investments have been made to comply with the best European technologies in the field with direct effect on reducing the polluting emissions from some sources and which improve the air quality in the refinery’s influence area.

Lukoil instalatie2PIR: PETROTEL-LUKOIL has recently completed one of the most modern plants to reduce the Catalytic Cracking Complex emissions. What exactly did the project include and what benefits has the modernization of installations brought, both economically and by providing a cleaner environment for the community?

Andrey Bogdanov: Based on a DuPont Belco license, this project aims to reduce emissions of SOx (sulphur oxides), NOx (nitrogen oxides) and the mechanical dust generated by the refinery’s Catalytic Cracking Plant regenerator. BELCO is one of the internationally renowned suppliers, which designs, builds and delivers safe systems and efficient gas flushing systems. Its commissioning was successful, the above mentioned emissions have decreased below the limit imposed by the national and European environmental legislation, for example:

  • SOx emissions have been reduced several times down to 50 mg/Nm3, the imposed limit by the environmental legislation (and hence the environmental license) being of 600 mg/Nm3;
  • NOx emissions have been reduced from 100 mg/Nm3, the imposed limit by environmental legislation being of 350 mg/Nm3;
  • Dust emissions have been reduced to 30 mg/Nm3, the imposed limit by environmental legislation being of 50 mg/Nm3.

Designed by taking into account the general environmental principles, the equipment generates an insignificant amount of waste, mostly harmless. The investment exceeded USD 20 million, adding to the USD 100 million the company has invested in environmental protection goals.

PETROTEL-LUKOIL Refinery fully meets currently the environmental requirements imposed by Decision 2014/738/EU establishing the level of emissions on best available technologies (BAT) for refining mineral oil and gas.

Although by the commissioning of the facility to reduce air emissions was also completed the Action Plan required by the Integrated Environmental Authorization, by benefiting from the support of Lukoil, refinery aims to continue to identify and carry out new environment projects that would improve the safety of technological equipment and would minimize its impact on the community.

The benefits have been mentioned above only in part, because there are many benefits arising from the upgrading of the refinery. The increase in the equipment technological performance had a beneficial effect on the environment; technical losses were cut by 20%, the level of emissions has decreased, including the volatile organic compounds, the level of pollutants ending up in the water treatment plant has decreased. As a strategic element of the overall coordination management of all processes, primarily those related to production, the environment policy provides the support for operations resulting in reduced environmental impact.

Another main direction for the financial effort (about USD 40 million) was the complex work on emptying and cleaning oil waste pits. Following the acquisition of Petrotel refinery by Lukoil, five oil waste pits were taken over. During the time (about 35 years) in these pits petroleum wastes resulting from the refinery’s earlier operations were deposited (sewage sludge, cleaning silts, acid tars and other wastes specific to the manufacturing technologies applied during the ‘50s-‘80s). For these so-called ‘historic’ pits, Lukoil group has undertaken to eliminate pollution and to comply with the European Directive on waste. Currently, PETROTEL-LUKOIL refinery has successfully managed the total greening of these pits before its deadline.

In order to keep under control the operations with higher impact on the environment, the company has put in place a system for on-line monitoring of emissions discharged into the atmosphere by the atmospheric distillation and vacuum distillation plants, by catalytic cracking and by the burning of waste gases. The terminals for loading oil products have not been forgotten either. Following the tanks equipping with internal membranes or double sealing systems, came along the modernization of the loading arms to which units for vapour recovery have been connected. Therefore, we reach our main objective - not the commercial one, but the social and ecological one, as Lukoil wants to be a partner for discussion and a long-term investor worldwide.

PIR: After nearly 18 years after the taking over of Petrotel by Lukoil, what is the refinery’s market positioning on national and regional level?

Andrey Bogdanov: PETROTEL-LUKOIL refinery is a modern refinery, the entire fuel production is Euro 5 since 2009. The refinery is vertically integrated within Lukoil. This allows optimum operation both in the supply of raw materials area and in the distribution of products one. At current capacity (2.5 million tons of crude oil), about 60% of the products are sold on the Romanian market, and 40% are exported (to Ukraine, Moldova, Hungary, Serbia, etc.) or to our partner within the group - Litasco.

Other factors leading to efficient means of processing and achieving the refinery’s strategic indicators are: the diversification of the processed range of raw materials, moving to heavy crude oils processing; energy efficiency of processes (note that PETROTEL-LUKOIL is the only refinery in Romania and in the group having a cogeneration power module on coke); the development of active trade policies that will boost the share of supplies on the Romanian market.

Andrey Bogdanov: short CV

Andrey BogdanovIn 1985, he graduated the Polytechnic Institute in Perm, in the Department of Chemical Technology for Oil and Gas Processing, the specialty of Chemical-Technologist engineer. During the same year he started working with the Synthetic Rubber Plant in the region of Tchaikovsk. Before being appointed Deputy Head of department, he worked as operator, chief operator, head of the shift. In 1992, the factory was closed down, only some ancillary work stations remained operational. Thus he went to the Perm Refinery (“Лукойл-Пермнефтеоргсинтез”) in May 1994, the first refinery he worked for; during 1994 to 1998 he held various positions, culminating with the Head of facility. In 1998 he joined the Nijninovgorod Refinery (“Лукойл-Нижегороднефтеоргсинтез”), as Production Manager on the oil sector, then as Chief Engineer on Refining.

In Nijninovgorod, he was part of a large project to build a connected oil processing complex, aiming to increase the processing depth, where he was assigned to prepare the staff and to develop working normative. Focus was laid on working within the facility: Catalytic Cracking, FCC, H2 Manufacturing, Production of Sulphur and alkylation. From July 2007 to February 2008 he made an exchange of experience within Conoco.

“What I can tell you is that they are focused on results, which I liked very much. We don’t have to reinvent the world, but to be aware how to apply what is good, useful and what we’ve learned – this is also something that I liked about Conoco. Over there, everything is well prepared - the questions, the meetings, each discussion - all to the point; anyone can bring an improvement to the operations, has to support his idea, and if it is a good thing, then everyone will work in that direction! It’s a world that I wanted to bring it here to our refinery, solution oriented, an equal world where everyone is rewarded according to what he does!”

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