OIL & GAS
OIL & GAS
The transition away from raw material exports towards deep processing is one of the main priorities of Russia's economic policy. At the end of 2020, Russian President Vladimir Putin noted the importance of more efficient use of associated petroleum gas. Reducing the volume of its flaring was identified as a key item on the environmental and climate agenda in the country. LUKOIL's 2020 sustainable development report states that last year the associated gas utilization rate was close to 98%.
The company is actively developing its oil and gas fields in the north of the Caspian Sea. Since 2000, LUKOIL has already launched two large projects there – one named after Vladimir Filanovsky and the other after Yuri Korchagin, with a combined annual production of more than 7 million tons of oil per year.
LUKOIL's new petrochemical plant in Budennovsk will help form one of the largest clusters in Russia for the production and deep processing of hydrocarbons. Stavrolen will use around 5 billion cubic metres of gas per year for production. This volume is comparable to the annual gas consumption of Ireland or Slovakia. 70% of feedstock for the complex will be provided by LUKOIL.
The company also plans to modernize its existing facilities, which will help increase the productivity of pyrolysis process units, as well as the volume and range of produced grades of polyethylene and polypropylene.
According to Vagit Alekperov, President of LUKOIL, total investments in the development of the petrochemical industry in the Caspian will amount to around 300 billion rubles, which will make this one of the largest Russian projects in the oil and gas industry.