Alania Oil to build 1.2-bln ruble oil refinery by 2016
VLADIKAVKAZ. Oct 21 (Interfax) - LLC Alania Oil plans to build a complex to produce and refine oil at the Korinskoye oil field in North Ossetia by 2016 at a cost of 1.166 billion rubles, a spokesman for the southern Russian republic's Economic Development Ministry told Interfax.
"This will be a structure that will include the whole production chain, from exploration and production of oil to its intensive processing and distribution of end products," he said.
A spokesman for Alania Oil told Interfax that implementation of the project is scheduled to begin in November, and construction and assembly work is scheduled to be done from December 2011 to August 2012, along with equipment purchases. Production will be fully set up by 2016. The refinery, which will be commissioned in two phases, will have capacity for 150,000 tonnes of oil per year.
The Vladikavkaz-based company plans to finance the project with its own and borrowed funds. Alania Oil intends to raise bank loans totaling 824 million rubles.
It was reported earlier that Alania Oil planned to build the oil refinery by 2014 and invest 600 million rubles in the project.
The company spokesman said the timetable and amount of investment were revised due to the opportunity to increase the amount of financing.
"The quality of the oil that the company expects to receive under the project is one of the highest in Russia - the oil is light, clean and does not contain harmful impurities," he said.
In addition, by setting up production of oil products in the republic, the company intends to set prices slightly below average market rates and maintain independence from monopolies.
"Since the cost of finished oil products is largely formed by the cost of crude and transport costs, we will have an advantage over companies working with purchased crude or shipping products into the republic from other regions," the spokesman said.
Alania Oil, which was formed in 2001 by private individuals, holds the license to explore for and produce hydrocarbons at the Korinskaya block for the period from April 17, 2001 to October 1, 2015. Oil reserves are estimated at 55 million tonnes. Production was launched in March 2010.