RUSSIA INDUSTRIAL BRIEFS

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Researched by Industrial Info Resources.

POWER

Foreign Investors Could Own 25% of Russia’s Power Generation

Anatoly Chubais, CEO of Russia’s major Russian power utility Unified Energy Systems (UES), told the “Financial Times” that 25% of the country’s power-generation industry would be open to foreign investors. He said that in the ”competitive” part of the market, there would be no limit on foreign control and that two to five strategic foreign companies would own up to a quarter of Russia’s generation business. The state would retain the power grid, the power distribution network and nuclear- and hydropower-generation capacity. Keen to attract foreign companies for capital and modern technology, Chubais said that $8 billion had been raised by selling stakes in power companies and that $15 billion more was needed to build power stations and upgrade networks.

REFINING

Fluor Bags Tatar Refinery EPC Management

Fluor Corporation has signed an agreement to provide project-management consulting services for the construction of a refinery complex for Russia’s energy major Tatneft in Tatarstan. Fluor will provide engineering, procurement and construction management services for selected scopes of work focused on utilities, off-sites and infrastructure for the complex. The definitive contract to establish value, scope and project schedules is set for late 2007 or early 2008. When completed in 2009, the $3.3 billion complex will have capacity for 7 million tons of crude oil per annum (about 150,000 barrels per day). Future phases will include a deep-conversion 75,000 bpd refinery and an aromatic-hydrocarbons-fed petrochemical plant. The latter are not part of the current scope.

PETROCHEMICALS

$1 Billion Plant to Process Plastic and Raw Petrochems

Lukoil-Neftekhim will invest $1 billion in Karpatnaftokhim (KTH) for a new plant to process plastic and raw petrochemicals in Kalush, Ukraine. $600 million more will be invested in a plant for new products such as chlorine, caustic soda and 350,000 tons per annum (TPA) of polyvinylchloride. KTH exports raw materials to Romania, Hungary and Poland, and often return as value-added products. The KTH plant will produce plastic for windows and aluminum window profiles. The company uses the facilities of Lukor to produce vinyl chloride, hydrate of sodium and chloride, ethylene and propylene.

Dow Negotiating $3 Billion Volgograd Project

Nikochem is finalizing the feasibility of building a $3 billion petrochemical complex in Volgograd in central Russia. The company expects to begin construction at the end of 2008. The complex will produce 500,000 TPA of polyvinylchloride, 450,000 TPA of polyethylene and 400,000 tpa of polypropylene. Planned commissioning date is 2012. Nikochem is negotiating with Dow Chemical and Lukoil-Neftekhim to participate in the privately financed project. The project will need 2 million TPA of raw materials and is negotiating for 1.5 million TPA of gas oil from Lukoil’s refinery, which is 500 meters from the new plant site. The project is also looking to the northern Caspian region to provide 500,000 million TPA of LPG as an alternate feed.

METALS & MINERALS

Arcelor Mittal to Receive Iron Ore Supply

Metalloinvest, which comprises a group of Russian metallurgical companies, will supply ferrous ore to the world’s largest steel producer, Arcelor Mittal, for five years. Under the contract, up to 10 million tons of iron nuggets and iron ore concentrate will be supplied to the steel company’s plants in Eastern Europe and Kazakhstan. The Russian group has ongoing talks with other major potential partners, including U.S. Steel.

Stamping Plant in St. Petersburg to Supply Automakers

MMK intends building a stamping plant and service center in St. Petersburg. Up to 2010 the plant will process 125,000 TPA of steel, which could be raised to 300,000 TPA. High-quality sheet steel will come from Magnitogorsk Iron and Steel for the production of sheet blanks, stamped panels and stamped and welded parts for the assembly plants of Ford, Toyota, GM, Nissan and others. Products will go to local and foreign white goods plants of Bosch-Siemens and Electrolux. A new service center will target heavy industry in the Leningrad region.

Kazakhstan to Get Ore-Processing Plants, Copper Smelter

Russian Copper Company (RCC), the country’s third-largest copper producer, will invest $614 million to build ore-processing plants and a copper smelter in Kazakhstan. To be completed by 2013, the plants will have annual capacities of 46,000 tons of copper concentrate, 50,000 tons zinc concentrate and 40,000 tons of copper products. RCC has said that it plans to double production of copper cathode to 300,000 TPA by 2010.

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