Tyumen Oil Co., Moscow, announced in mid-summer two separate agreements widening its involvement with Western companies.
With W.R. Grace & Co., Columbia, Md., Tyumen signed a catalyst marketing agreement to market hydroprocessing catalysts in Eastern Europe and the former Soviet Union (FSU).
Also in July, the company announced its 67.41% acquisition of the Lisichansk oil refinery (Linos) in the Ukraine, which will expand the lubricant marketing region of its partner Texaco Inc., White Plains, NY, to the Ukraine.
Tyumen recently expanded its relationship with Texaco to include commodity risk management. The two companies jointly market Texaco-branded imported lubricants and Tyumen and Texaco-branded lubricants produced and blended at the Ryazan refinery.
Joint effort
W.R. Grace & Co. and Russia's Tyumen agreed to market hydroprocessing catalysts in Eastern Europe and the former Soviet Union. Catalysts will be produced at Tyumen's Ryazan refinery, 120 miles southeast of Moscow. Grace, a supplier of refining catalysts, will provide its expertise to market hydroprocessing catalysts in Eastern Europe and the FSU as well as its technology to produce hydroprocessing catalysts. "This agreement will allow Tyumen Oil to modernize its manufacturing operations using the latest technology," Tyumen President and CEO Simon Kukes said.
Hydroprocessing catalysts comprise about 40% of the $2 billion global refining catalyst market. Tyumen began producing catalysts in April 1999. The company said it expects continued growth in catalyst sales through this alliance.
Production boost
With the acquisition of the Linos refinery in the Ukraine, Tyumen intends to boost the refinery's production. The company signed papers in July finalizing the bid of $9.76 million it made at a public auction for a 67.41% interest in the formerly state-owned facility. The company will also assume $63 million in debt.
Tyumen plans to invest $2.4 million in the refinery's working capital and $11 million to modernize the plant over the next 5 years. The firm wants to boost the refinery's capacity beyond the design capacity of 361,000 b/d.
The Linos refinery marks Tyumen's first acquisition outside Russia. The company said the acquisition also lays the foundation for its partners, such as Texaco, to enter the Ukrainian market.
To maximize the refinery's potential, Tyumen plans to establish a sales and distribution network for Linos's products, which include gasoline, diesel, fuel oil, polypropylene, ethylene, and other chemicals. It also will sell lubricants in Ukraine through a joint venture with Texaco.
