Gazprom Neft Starts Modernization of Serbia's Pancevo Refinery

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Researched by Industrial Info Resources (Sugar Land, Texas)--Russian company Gazprom Neft (OTC:GZPFY) (Moscow), owner and operator of the 96,000-barrel-per-day (BBL/d) refinery in Pancevo, Serbia, signed a 47.4 million euro ($70 million) contract with CB&I Lummus (The Hague, Netherlands) for the engineering, procurement, and construction management of the Pancevo Refinery modernization project, which aims to modernize the production site.

The scope of work includes detailed engineering, procurement services, construction management and commissioning of the 25,000-BBL/d mild hydrocracker unit (licensed by Chevron Lummus Global) to produce diesel fuel. Work will also occur on associated support units, including the sour water stripper and amine treatment unit. A revamp and modernization of auxiliary and off-site utilities units will also occur.

On March 2, the first announcement for procurement of equipment such as a hydrocracking reactor, a hydrotreating reactor and a high-pressure separator were made as part of a 550 million euro investment program for modernization and reconstruction of the refinery. The construction is scheduled to kick off in February 2010, and the completion date of the project is set for the fourth quarter of 2012.

Gazprom Neft, OAO Gazprom's (OTC:OGZPY) (Moscow) oil subsidiary, paid 358.5 euros ($529.4 million) in February 2008 for the acquisition of 51% of the shares in Naftna Industrija Srbije (Belgrade, Serbia), becoming the major shareholder and operator of Serbia's only two refineries--the Pancevo plant and the 60,000-BBL/d Novi Sad facility. Gazprom agreed to invest another 488 million euros ($721 million) by 2012.

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