Naftna Industrija Srbije AD (NIIS), the Serbian oil and gas company controlled by Russia’s OAO Gazprom Neft (GAZP), said it will invest at least $100 million in its Novi Sad refinery for production of base oils and lubricants.
NIS plans annual output of 180,000 tons of base oils and lubricants as of 2015 when it expects to complete the upgrade using technology from Chevron Lummus Global USA, a joint venture of Chevron Corp. (CVX:US) and Netherlands-based CB&I Lummus BV, NIS Chief Executive Officer Kirill Kravchenko told reporters in Belgrade today. Work on the upgrade may start in 2013, pending shareholders’ approval and a feasibility study to be completed by the end of the year, he said.
The resource base for Novi Sad production will be crude from its oil fields in Serbia’s northern Vojvodina province “because the quality is just ideal for making base oils,” Kravchenko said.
NIS will finance the upgrade with its own cash, said Nikolas Petri, NIS’s chief of strategic planning. The planned output will comprise some 75,000 tons of naphthenic oils and 105,000 tons of paraffinic oils a year, used for making tyres, plastics, engine lubes and transformer oils.
The intended markets are mostly in southeastern Europe where NIS sees “strong and stable demand” on rising industrial usage, he said.
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