Siemens to build own power plant for Kazanorgsintez by 2023

Three contracts at once

The contract for the construction of CCGT-250 for Kazanorgsintez PJSC was signed by CEO of Kazanorgsintez PJSC Farid Minigulov and President of Siemens in Russia Alexander Liberov. The signing was participated by Chairman of the Board of Directors of Kazanorgsintez, Director General of TAIF PSC Ruslan Shigabutdinov, as well as Deputy Prime Minister — Minister of Industry and Trade of the Republic of Tatarstan Albert Karimov and member of the Board of Siemens AG Lisa Davis.

In addition to the contract for the construction of 250 MW CCGT, the German concern signed two agreements on servicing the gas turbine units for Nizhnekamskneftekhim and Kazanorgsintez. The document was signed by Azat Bikmurzin, the director general of Nizhnekamskneftekhim PJSC. The contracts have been awarded for a total amount of 290 million euros.

During the press briefing on the results of the signing of the agreement, Ruslan Shigabutdinov told the correspondent of Realnoe Vremya about the main goal of the construction of the generating capacities of TAIF Group.

“The main purpose of the construction of power facilities for TAIF Group and Kazanorgsintez is to ensure the energy security of the enterprises. Siemens offers the latest state-of-the-art technology that will enable us to use swept-off gases to generate energy, eliminating their combustion into the atmosphere. We will get a good environmental and economic effect. We will significantly improve the environmental situation in the area of Kazanorgsintez, Kazan and Tatarstan,” said Ruslan Shigabutdinov.

Deputy Prime Minister — Minister of Industry and Trade of the Republic of Tatarstan Albert Karimov added that the project of construction of CCGT-250 for Kazanorgsintez PJSC is important for Tatarstan for several reasons. The main thing is that this is an important stage of the strategic partnership that the republic is developing with Siemens, as a global industrial leader. Tatarstan cooperates with the company on industrial, medical, educational projects, and also works in the field of digitalization.

“The signing of the agreement is a significant contribution to the development of strategic partnership. Besides, it is important that this project will increase the reliability and uninterrupted operation of the important object for Kazan such as Kazanorgsintez plant. It is also important for Kazan that the construction will be carried out using strict environmental standards. The latest technologies will improve economic performance, reduce the cost of electricity, which will lead to the increased energy efficiency of production and this means an increase in added value, which will be formed at the enterprise and will affect the replenishment of the budget of the Republic of Tatarstan. We welcome these decisions and agreements and are ready to provide full support to this and other contracts with Siemens,” commented Albert Karimov.

“Kazanorgsintez and Nizhnekamskneftekhim have full power supply”

In turn, President of Siemens in Russia Alexander Liberov told the reporters that digitalization is not an end in itself. It is only a way to improve the efficiency and competitiveness of the enterprise or industry nationally and globally.

“I can give an example of preventive diagnostics of turbines when by means of digitalization it is possible to reveal problems before something breaks. This will allow to repair, replace spare parts timely and save company costs, as well as to improve the quality of service for the end user,” said the president of Siemens in Russia.

Ruslan Shigabutdinov also answered the question of how much the petrochemical enterprises, part of TAIF Group, are provided from the energy point of view.

“The enterprises of TAIF Group — Kazanorgsintez, Nizhnekamskneftekhim — are global players in the market of polymers and rubbers. The energy component in the cost of final products occupies a significant part. Therefore, any ruble saved in this direction gives a budgetary effect for the enterprise, for the region and for the country as a whole. We see in this a serious effect on the work with the cost.”

TAIF Group has worked hard to restore the energy supply of the enterprises, which was laid back in the Soviet Union. Such large enterprises should have two or better three separate in-feedings. In difficult times, this issue was never resolved. Now Kazanorgsintez and Nizhnekamskneftekhim have full power supply. This affects the safety of work, the absence of problems with energy. Statistics show that in recent years the enterprises have not had shutdowns,” Ruslan Shigabutdinov said.

“The presence of the installation, which is part of the system to ensure the energy security of the enterprise, is priceless”

Albert Karimov also noted the importance of the project of the construction of the combined cycle power plant from the point of view of the energy balance of the republic. Tatarstan was an energy-deficient region, this situation persisted for several years.

“If last year we consumed about 30 billion kWh, then more than 3 billion kWh was transferred to the republic. The emergence of a new source of generation helps to restore energy balance and to solve the problem of restoration of the fully required amount of generation to cover the needs of the Republic of Tatarstan.”

Director General of Kazanorgsintez PJSC Farid Minigulov described the economic effect that the company is going to receive from the installation.

“We expect to save about 2 billion rubles annually by reducing the cost of electricity. Naturally, the installation is necessary for energy security and safety. The company will continuously receive electric energy,” said Farid Minigulov.

“When the company's revenue is less than 10 billion rubles, undervoltage is not so critical. When the company receives revenue in the amount of 100 billion rubles, undervoltage leads to serious financial losses: this is the lost revenue, profits, taxes and all the ensuing consequences. The presence of the installation, which is part of the system to ensure the energy security of the enterprise, is priceless,” said Ruslan Shigabutdinov.

Three companies participate in the tender

The tender to determine the best contractor for the construction and supply of equipment for 250 MW CCGT on the territory of Kazanorgsintez PJSC by TAIF Group was announced in February 2019.

The companies that are the largest players in the global market for the manufacture, supply and maintenance of equipment for the electric power industry applied for participation in the tender. There were three contenders: American General Electric, German Siemens and Italian Ansaldo Energia. TAIF has already implemented joint projects with all of them but Ansaldo Energia. After intensive negotiations, the oldest German concern Siemens has become the contractor for the construction and supply of equipment.

This is a partner of TAIF Group proven through long-term cooperation. Currently, Siemens in Russia is involved in the implementation of the Ethylene-600 project and the construction of CCGT-CHPP for Nizhnekamskneftekhim PJSC. Let us remind that the signing of the agreement on the construction of the power plant with Siemens turbines of 495 MW between Director General of Nizhnekamskneftekhim PJSC Azat Bikmurzin and Former President of Siemens in Russia Dietrich Meller took place at the end of 2017 at the headquarters of Siemens.

The powerful energy unit will provide electricity to all enterprises of the Nizhnekamsk petrochemical giant, including those the construction of which is only at the stage of planning. The new power plant will be installed with the equipment that will reduce emissions into the atmosphere, which will favourably affect the environmental situation of Nizhnekamsk.

The power plant “on a turnkey basis”

Siemens will work on the basis of EPC-contract in the case of Kazanorgsintez as well. The German concern as general contractor will manufacture and supply SGT5-2000E gas turbine with generator and SST-600 steam turbine with generator. It is also provided to supply the automated process control system for the power plant and equipment for the power distribution scheme. The project will be implemented by Siemens together with a subcontractor — Enka construction company from Turkey.

The CCGT includes the gas turbine unit, which uses fuel gas for actuator, and the steam turbine, which uses high-pressure steam, produced by utilizing exhaust heat from the gas turbine unit. The project duration is 41 months. The commissioning of the CCGT is scheduled for March 2023.

“The construction of the combined-cycle plant means not only the creation of its own energy capacities for the further development of the enterprise,” noted Ruslan Shigabutdinov, the director general of TAIF PSC and chairman of the board of directors of Kazanorgsintez. “The project will enable to optimize the cost of production of final products and, at the same time, to reduce the impact on the environment.”

The effect is planned to be achieved through the use of synthetic gas as fuel for the gas turbine plant. Synthetic gas is a by-product of the production of Kazanorgsintez JSC. Thus, directing it to the gas turbine plant, the company will solve two problems at once: the supply of the CCGT with fuel and the utilization of by-products of production with simultaneous reduction of emissions into the atmosphere.

The company plans to implement the project using 15% of its own funds and 85% of borrowed funds through the involvement of Euler Hermes export credit agency.

“The new power plant in Tatarstan is the second major joint project of Siemens and TAIF, which demonstrates the high level of trust between our companies. In 2017, we signed a contract for the construction of a station with a capacity of 495 MW for Nizhnekamskneftekhim PJSC,” reminded President of Siemens in Russia Alexander Liberov. “I am sure that modern solutions that will be used in the construction of CCGT-250 will provide safe, reliable and efficient power supply to the production sites of Kazanorgsintez PJSC.”

Let us remind that Siemens reconstructed the ethylene compressor at the plant of high-pressure polyethylene and updated the extruder of the plant for the production and processing of low-pressure polyethylene for Kazanorgsintez. In 2014, TAIF Group and Siemens AG signed an agreement on strategic cooperation, and last year, during Russian Energy Week 2018, another agreement was signed, which complemented the previous one. The new document enabled TAIF Group’s enterprise to expand cooperation on direct purchases of Siemens equipment, components and spare parts.