Neftegazindustriya to start building oil terminal at Novorossiysk port in 2014
KRASNODAR. Dec 11 (Interfax) - Krasnodar territory-based LLC Neftegazindustriya, which owns the Afipsky Oil Refinery, plans to start building a petroleum product export terminal at the Port of Novorossiysk in 2014, the company's management told Interfax.
This new terminal will be able to handle around 11 million tonnes of petroleum products a year.
Neftegazindustriya did not tell Interfax the exact amount of investments in the project, noting only that it will not surpass $1 billion. The project is expected to pay itself back in three years.
The chairman of the company's board of directors, Yury Krymsky, told Interfax that it is too early to talk about how much will be invested, since Neftegazindustriya has only just started to create the working project, which will take ten to 12 months.
"Once we have the working project in our hands, then we can talk about definite amounts of investment. Right now these estimates are approximate, but as an upper threshold I can indicate $1 billion. We will not attempt yet to confirm how much it will actually be, but we expect it to be a lot cheaper," Krymsky said.
The terminal will be constructed exclusively with shareholder funds, without the participation of the Russian government.
"There are no plans to raise budget funds or measures of government support for implementing the project," Krymsky said.
Neftegazindustriya intends to erect the terminal at the Port of Novorossiysk, through which it will predominantly transship diesel fuel. Petroleum products will be delivered by pipelines built from the Afipsky Oil Refinery.
The company will start designing the facility next year, a process that will take around a year. Construction will kick off in 2014, and the terminal will be commissioned within a year and a half, according to Neftegazindustriya's estimates.
The Russian Transport Ministry has authored a draft law to widen the boundaries of the Port of Novorossiysk by including in it the borders of land plots intended for the construction of a petroleum product export terminal.
The Afipsky Oil Refinery is capable of churning out 5.2 million tonnes of petroleum products a year, and next year it plans to boost that capacity to 6 million tonnes.
"In addition, in the upcoming years oil refining capacity will practically double thanks to the construction of a second phase," Neftegazindustriya's management said.
The terminal will be built exclusively to meet Neftegazindustriya's needs.
According to Interfax's SPARK database, 99% of the company belongs to Cyprus-based Lakescope Limited, and 1% belongs to Windport Limited.
Founded in December 1963, the Afipsky Oil Refinery is now one of the largest oil refineries in the south of Russia. The enterprise specializes in producing furnace oil, fuel oil, straight-run gasoline, kerosene and diesel fuel.
