Poland’s Grupa Lotos lets contract for Gdansk refinery upgrade

Grupa Lotos SA, Poland’s second largest refiner, has let a contract to KT-Kinetics Technology SPA, a subsidiary of Maire Tecnimont SPA, Milan, for engineering, procurement, and construction (EPC) of main units involved in the upgrade of its subsidiary Lotos Asfalt’s 10.5 million-tonne/year (tpy) Gdansk refinery.

The scope of the lump-sum turnkey EPC contract covers implementation of three major units, including a delayed coker (DCU), a coker naphtha hydrotreater (CNHT), and a KT-licensed hydrogen generation unit (HGU), as well as associated units and infrastructure at the site, Grupa Lotus and Marie Tecnimont said in separate statements on July 14.

Valued at €304 million, the contract also requires KT to implement best available technology for produced-coke downloading and dewatering in order to mitigate environmental impacts associated with the delayed coking process, Marie Tecnimont said.

Due to be commissioned in 2018, the upgrading project comes as part of Grupa Lotos’ Effective Refining Program (EFRA), which is designed to increase the refinery’s yield of high-margin middle distillates while simultaneously reducing in its output of less profitable heavy products.

The company, which secured final financing for the project in late June, said it expects EFRA will boost overall production of high-margin products (primarily diesel oil and aviation fuel) to about 900,000 tpy, as well as lift its refining margin by about $2/bbl, according to a June 30 release.

Total capital cost of the project is estimated at about €517 million, Grupa Lotos said.

In addition to the DCU, CNHT, and HGU, EFRA will include installations for coke storage and loading, an hydrowax vacuum distillation unit (HVDU), and oxygen generation unit (OGU), according to the company.

Proposed capacities for the project’s planned units were not disclosed.

In late June, Grupa Lotos issued investors the following timeline for EFRA’s completion:

• Fourth-quarter 2014: Execution of contracts for HDVU and OGU.

• Second-quarter 2017: Performance of EFRA-related work during Gdansk refinery’s scheduled maintenance shutdown and completion of OGU.

• Fourth-quarter 2017: Completion of HGU.

• First-quarter 2018: Completion of HVDU.

• Third-quarter 2018: Completion of tests and full commissioning of all EFRA units, including DCU.

Contact Robert Brelsford at rbrelsford@ogjonline.com.

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