Tecnicas Reunidas Bags $800 Million Russian Refinery Expansion Project

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Researched by Industrial Info Resources (Sugar Land, Texas)-- Tecnicas Reunidas (NYSE:TNISF) (Madrid, Spain) has signed an $800 million EPC (engineering+procurement+construction) contract with Russia’s Alliance Oil Company (Khabarovsk) for the construction of a hydroprocessing complex in the existing Khaborovsk refinery in eastern Russia. The contract forms part of an overall refinery upgrading program and covers a 1.18 million tons per annum (tpa) hydrotreating unit for jet kerosene and diesel, a 500,000 tpa hydrocracking unit and a 20,000 tpa hydrogen production unit. The scope of the contract also covers a combined unit for amine regeneration, sour water stripping and a 13,000 tpa sulfur recovery unit.

In 2006, Foster Wheeler Energy (NASDAQ:FWLT) (Reading,UK) (Clinton, New Jersey) was awarded the contract to provide management and engineering services for the hydroprocessing expansion project at Khabarovsk. FW consolidated five licensed process design packages, including FW’s hydrogen production facility design with front end engineering designs from other companies for the contractor bid package. FW carried out the EPC technical bid evaluation and supported Alliance in the EPC contractor selection process. Shell Global Solutions (NYSE:RDS-B) (London,UK) and Technip (OTC:TNHPF) (Paris, France) technologies are also in the design package. Alliance has obtained the required government permits for the constriction of the units.

The contract will be executed in 39 months and a number of units will be completed before 2010. These will be the catalytic reforming unit upgrade to a 450,000 tpa capacity, the building of a Visbreaking with the vacuum residues conversion unit and the integration of the existing refinery into the new complex. These units will cost around $200 million. The total cost of the refinery upgrade is estimated at $1 billion and is scheduled for completion in 2011.

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