Lukoil marks Stavrolen fertilizer project with foundation-stone ceremony

A fertilizer project in Budennovsk

Lukoil has held a foundation-stone ceremony for a gas chemical complex at its wholly owned Stavrolen plant in Budennovsk, Stavropol Territory, Russia. The Aug 28, 2024 event marked a project to produce urea and ammonia using natural gas from the company’s North Caspian fields.

The regional government expects annual urea output of about 1.75 million tonnes and a five-year implementation period. Planned investment totals RUB 163 billion, according to the regional Economic Development Ministry. Governor Vladimir Vladimirov expects around 600 new jobs, additional tax receipts and improvements to road, utility and social infrastructure. These are projections for the proposed complex. Stavrolen already produces polyethylene and polypropylene. Interfax

Engineering cooperation with CC7

Lukoil and China National Chemical Engineering & Construction Corporation Seven, known as CC7, signed a cooperation agreement on Nov 13, 2023 for a gas chemical facility in Budennovsk. The agreement provided for project documentation to be developed in cooperation with Russian companies. Urea production would use natural gas extracted from Lukoil’s North Caspian fields.

CC7 is wholly owned by China National Chemical Engineering Corporation. At the time of the agreement, Lukoil and the Stavropol authorities were examining a possible incentive mechanism in the form of a special investment contract. The arrangement remained an option under consideration, rather than an announced signed investment contract. Lukoil’s 2023 agreement

The earlier gas-processing programme

The Stavrolen site had an existing gas-processing development programme before the fertilizer ceremony. On Oct 7, 2021, a foundation stone was laid for the second-stage gas processing unit, GPU-2. Lukoil expected the project to increase utilisation of associated petroleum gas supplied from North Caspian fields to 5 billion cubic metres annually.

GPU-2 was the first unit in the integrated development programme. Its intended role included supplying more ethane and natural gas liquids for pyrolysis. Lukoil also planned larger pyrolysis capacity and a broader range of polyethylene and polypropylene products, with the following annual capacity targets:

• ethylene: from 350,000 to 420,000 tonnes;
• polyethylene: from 300,000 to 405,000 tonnes;
• copolymer polypropylenes: from 80,000 to 120,000 tonnes.

The first gas-processing complex already had an annual feed rate of 2.2 billion cubic metres, enabling petrochemical manufacture from the company’s own gas feedstock.

Stavrolen’s actual 2020 production totalled 343,000 tonnes of ethylene, 319,000 tonnes of polyethylene and 113,000 tonnes of polypropylene. The plant reached its eight-millionth tonne of cumulative polyethylene production in 2021. Lukoil’s development programme