From export of raw materials to own production: first oil refinery of Tatarstan

First in Tatarstan

As already noted in the first part of the article, in the early 1990s, in the conditions of the collapse of the USSR and the economic recession that engulfed the country, regions and companies had the opportunity to independently enter the foreign market with its own products. In the new economic conditions, Tatarstan paid attention to hard-to-recover oil reserves and focused on creating its own oil refining. The basis of the future oil refining production of Tatarstan was the ELOU-AVT-7 unit, which TAIF leased from Nizhnekamskneftekhim and registered a new legal entity at the Nizhnekamsk industrial site — the subsidiary of TAIF-NK.

Commissioned back in 1979 and intended for the primary wet distillation of oil with its fractionation into desired cut, by the mid-1990s the unit had worn-out capacities and extremely low loading. With a design oil refining capacity of up to 6 million tonnes a year, ELOU-AVT in 1994-1996 actually produced only about 2,5 million tonnes of raw materials a year. And the conversion rate at that time did not exceed 35%.

Almost from the very moment of its creation, in the autumn of 1997, in order to increase the efficiency of work and reduce the risks of breakdowns during the operation of this equipment, the new company became engaged in its modernisation, simultaneously reaching agreements on the supply of raw materials with Tatneft. The funds invested in the reconstruction fully justified themselves. Already in 1998, the volume of refined oil reached the design capacity. Accordingly, the volume of production of light oil products also increased.

The presence of own oil refining production in the republic turned out to be very useful in the most difficult year of 1998, when, under the conditions of a sharp economic downturn, TAIF, at the instruction of the leadership of the republic, assumed obligations to supply its products under preferential terms for the needs of agriculture and industrial facilities.

“Having supported oil workers, rural producers, power engineers, TAIF assumed the maximum loads. Having mobilised all our forces and capacities, we still managed to work profitably," Albert Shigabutdinov, then director general, current chief adviser to the director general of TAIF JSC for development, and chairman of the board of directors of the Group's parent company, recalls about this difficult period.

First in Russia

Unlike most refineries in Russia and the world, which are focused on the production of either only motor fuels or exclusively raw materials for petrochemical production, TAIF Group oil refining company has combined these areas since its foundation. At the same time, they have to work with local super-heavy and high-sulphur raw materials, which leads to faster wear of the equipment. In the world, hardly any is engaged in the processing of such heavy oil in its pure form. And if they are, then a multi-stage technology is used, where heavy oil is first converted into synthetic oil and only after that it is processed using traditional technology.

From the first days, TAIF-NK set a course to expand the product line (at the beginning stage, it included only straight-run gasoline and high-sulphur boiler fuel), increasing the volume and convertion rate of raw materials, increasing the share of light oil products output. To do this, the specialists of both the parent company and TAIF-NK itself actively studied domestic and international experience in search of the most effective technologies.

Many companies, including those with names known all over the world, began to offer their services only in the construction of a gasoline production plant, estimating their services at about $650 million. TAIF chose its own path and started implementing the project in 2003. In December 2005, the production was put into operation. The total cost amounted to $130 million, which is 5 times lower than the prices announced by foreign manufacturers. TAIF borrowed most of these funds. Time has shown that the project is successful and the investments justify themselves. Already 2 months after commissioning, the first batch of gasoline that meets the requirements was received. Later, the gas condensate processing plant was built and put into operation. The total cost of the project reached 178 million US dollars.

The project was led by Vladimir Presnyakov, the deputy director general of TAIF JSC for petrochemistry and oil refining. As Albert Shigabutdinov noted: “Presnyakov is 90% responsible for such a successful and effective implementation of such large-scale tasks. These were his ideas and developments. The project manager, thanks to his experience and knowledge, managed to find and implement such an effective solution that no one believed and still does not believe that such a thing is possible, but we did it.”

The further development of such a large-scale project in an economically difficult period required the consolidation of the efforts of TAIF JSC, Nizhnekamskneftekhim PJSC and Tatneft PJSC. In 2005 (by this time, the oil convertion rate had already reached 63%, which was almost twice the figures of the late 1990s), TAIF compensated Nizhnekamskneftekhim and Tatneft for the costs incurred for the construction of the complex of medium distillates, viscosity breaking unit, the unit for producing non-oxidized road bitumen, the unit for the preparation and storage of jet fuel, and the sulphur recovery unit and the warehouse for its storage. The total amount that TAIF paid to its partners exceeded 400 million US dollars. Today, for this money, one can build a completely new production facility. This was not easy for the company: it was necessary to consolidate almost all available resources, take out a large loan — almost 370 million US dollars. But they did it. They continued to invest in the modernisation and expansion of the production capacities of the complex, increasing the convertion rate of raw materials.

In 2006, the gas condensate processing plant reached its design capacity, which allowed to increase the annual volumes of processed raw materials by another million tonnes.

By 2007, the product line, in addition to straight-run gasoline and boiler fuel, also included aviation kerosene, diesel fuel, Euro 2 and Euro 4 motor gasolines. However, Euro 2 already went down in history in 2008, and TAIF-NK, together with British company Criterion Catalyst, completed the reconstruction of the hydrotreating plant for medium distillates, which made it possible to produce Euro 4 diesel fuel in the amount of 1,65 million tonnes a year. The capacity of petrol production was 600,000 tonnes a year.

In 2010, now together with Dutch Shell Global Solutions, the company again modernised the medium distillate hydrotreating plant, connecting an additional reactor and a number of new units to it, increasing its capacity by almost a third of the design one. It was brought to full capacity in 2012 and became capable of producing 2,3 million tonnes of Euro 5 diesel fuel a year (the first in Russia to fully switch to its production), and the depth of processing of raw materials exceeded 74%. In November 2015, TAIF-NK, ahead of federal requirements, completely switched for the production and automotive fuel of the Euro 5 standard.

For information: the sulphur content in Euro 2 petrol is up to 500 milligrams per kilogramme, in Euro 3 — about 150 mg per kilogramme, in Euro-4 — 50 mg per kilogramme of fuel, and in Euro-5 — only 10 mg.

By this time, TAIF-NK was already processing 8,4 million tonnes of oil and gas condensate a year, producing 25 types of products: raw materials for petrochemical industries, gasoline, jet, marine and diesel fuel, aviation and technical kerosene, road bitumen, liquefied and hydrocarbon gases, etc.

In an effort to eliminate the possibility of falsification of diesel fuel and gasoline produced, most of which are sold on the territory of Russia and Tatarstan, as well as in order to make its products more accessible to consumers of Tatarstan and neighbouring regions, TAIF-NK developed its own network of gas stations. In 2008, the company had only one own filling station — at the entrance to Kazan, in 2010-already 24, and by 2017, when the network of filling stations was separated into an independent structure of TAIF-NK AZS, it already had more than 220 stations and became the largest retail network of filling stations in the republic.

First in the world

“This is impossible," such words are heard quite often when TAIF announces the launch of another large-scale project. Skeptics claim that it is impossible to achieve great results with less investment, that it is unrealistic to implement projects so efficiently and quickly, or they say that the chosen technology “will definitely not work” simply because no one has implemented it on such a scale before. But, as a rule, doubters are soon forced to admit that they are wrong again. The secret is that the start of the project was preceded by a thorough analysis and study by specialists of the Group.

In 2011, a license agreement was signed with American Kellogg Brown&root, Ltd (KBR) for the Veba Combi Cracking (VCC) technology, and in February 2012, with the support of the shareholders of TAIF JSC, TAIF-NK started implementing one of its most ambitious projects — the construction of the Heavy Residue Conversion Complex (HRCC). The event was preceded by 8 years of painstaking work on choosing the optimal technology.

The foundation stone of the new production was laid on November 9, 2012. The ceremony was attended by President of Tatarstan Rustam Minnikhanov, Albert Shigabutdinov (at that time — Director General of TAIF JSC), Deputy Director General of TAIF JSC Vladimir Presnyakov (the ideological mastermind of the project, who had scrupulously studied the subtleties and possibilities of the technology for almost 10 years before), Vice President of Kellogg Brown & Root Anand Subramanian, Vice President for Russia and the CIS of Air Liquide Jan Keller, Mayor of Nizhnekamsk Aydar Metshin and other officials faces.

The VCC technology is based on the developments of German scientist Friedrich Bergius, made back in 1913. We are talking about the catalytic hydrogenation of coal under the influence of hydrogen under high pressure and at high temperature. It was used by the Third Reich during the Second World War.

Already in peacetime, Veba continued to develop the technology. A pilot plant was even built in Germany, but in the conditions of low oil prices, with small production volumes, it turned out to be economically unprofitable. Let's say more: the technology was so expensive at that time that the only unit had to be stopped. And the patent for the promising technology together with the company was bought by the Anglo-American corporation BP, which through a tender delegated to the American company Kellogg Brown & Root (KBR) the right to design, create and sell units using VCC technology around the world. But until the 1990s, again due to the high cost of processes and a sufficient amount of light oil, the technology was not in demand. In 2011, TAIF-NK JSC signed a license agreement with KBR. VCC got a new chance to revive.

“The licensed VCC technology is an original process involving four consecutive hydrocracking reactors. The first three reactors, due to the patented technology, allow turning low-quality tar or any bituminous oil into pure “synthetic” oil or into pure vacuum gas oil. The fourth reactor is a classic hydrocracking, it is able to convert vacuum gas oil into naphtha, kerosene and diesel. At the same time, the quality of kerosene and diesel is not lower than the requirements of Euro 5 standards. It is important that this is not a complex of units, but one single unit of large-capacity capacity. The economic efficiency of VCC technology is 2-2,5 times higher than all known technologies for generating profit during oil refining," the explanation was given on its official website in February 2012 by JSC TAIF-NK. The implementation of this project is also carried out under the guidance and with the direct participation of the professional in his field, Vladimir Presnyakov.

The design capacity of the new raw material production is 2,7 million tonnes a year of tar and 1 million tonnes a year of vacuum gas oil. Putting the plant into operation with a full load of project raw materials will allow to achieve a conversion rate of oil raw materials up to 98%. Moreover, we are talking about the output of light oil products: diesel fuel, Euro 5 motor fuel, jet fuel, naphtha, propane and butane fractions, as well as granular sulphur.

The year 2014 was an eventful year for the production facility under construction. It was at this time that one of the most difficult stages occurred — the delivery and installation of large-capacity equipment for the VCC unit. This includes a 40-metre hydrocracking reactor weighing almost 1,400 tonnes, which arrived from India and was included in the Guinness World Records. It became the heaviest cargo in the world's history, delivered by seas and rivers. In 2017, all construction and installation works at the complex were completed and a comprehensive testing of the main and auxiliary production facilities began.

“This is a very complex, but very promising project. To the extent that it is implemented at TAIF-NK, it can be a revolution in the processing of heavy residues," Tatarstan President Rustam Minnikhanov stressed in November 2015, during a working trip to Nizhnekamsk.

Before TAIF, no one had ever implemented VCC technology on such a scale. And absolutely no one has tried to process heavy, high-sulphur, metal-saturated tar using this technology. This explains the caution of the Group of Companies in carrying out commissioning and comprehensive testing.

It is always difficult to be the first. Literally, in manual mode, in close cooperation with equipment manufacturers — leading companies in the USA, Japan, Germany, Italy, France, Korea, China and India, alloys are selected, the composition of the internal coating of the main technological equipment, where direct contact with raw materials occurs at high pressure and temperature. Skeptics see only difficulties, specialists, management and shareholders of TAIF see prospects. The live, tested, really working on an industrial scale technology will open up completely new horizons for world oil refining in conditions when there are fewer and fewer reserves of light oil in the world and the need for processing heavy, high-viscosity oil with a high content of sulphur and aggressive impurities is becoming more acute.

By the way, since May 15, 2020, the VCC unit at the HRCC processes exactly the project raw materials — tar. This was announced to President of Tatarstan Rustam Minnikhanov at the Tatarstan Petrochemical Forum, which was held in September 2020 at the site of the Kazan Expo exhibition complex at that time, the chief engineer, and today the director general of TAIF-NK JSC Maksim Novikov.

“Now we are in the mode of comprehensive testing and in three months we have achieved positive project results for the conversion of tar, for processing. The conversion of tar into light petroleum products amounted to 92%. In other words, almost the entire volume of the refinery's residual oil product (tar) is processed into light oil products," he noted.

During the period from May 15 to August 15, 2020, in the mode of complex testing, the HRCC processed 703,000 tonnes of raw materials, of which 404,000 tonnes were tar, 281,400 tonnes — vacuum gas oil. The capacity utilisation factor is 72%.

“I think the president appreciated our success, and we will continue to develop capacities. The most important thing is to start working steadily, processing and receiving high-quality petroleum products. The process is still stable, but it takes time to hone all the skills and identify bottlenecks," Maksim Novikov shared later in an interview with Realnoe Vremya.

Gas for Nizhnekamsk

The VCC technology itself is very economical. Tar is inexpensive, especially when it is produced by the company itself — the owner of the unit. The fuel for ensuring production processes is natural gas, of which about 600 million cubic metres a year are required a year by the HRCC. There could have been problems with this until quite recently. Since the times of the Soviet Union, numerous industrial enterprises have been actively developing in Nizhnekamsk. The processes have continued in the recent history of Russia and the Republic of Tatarstan. The volumes of existing production facilities of both Nizhnekamskneftekhim and TAIF-NK have grown significantly, local thermal power plants have increased their heat generation, the giant TANECO has grown in the neighbourhood, the construction of the first stage of the EP-600 ethylene complex and the methanol plant have begun.

All these existing, ongoing and planned projects require an increase in fuel volumes. Natural gas is also needed by many other industries and companies that are not related to oil refining, petrochemistry and energy. Meanwhile, the capacity of the existing main gas pipeline (the branch to Nizhnekamsk industrial hub of Gazprom Transgaz Kazan PLC) has already been exhausted so much that during the maximum loads, for example, during the peak moments of the heating season, thermal power plants were forced to switch to reserve fuel — fuel oil. By 2025, in comparison with 2009, the planned consumption of natural gas in Nizhnekamsk will grow threefold. The unsecured demand for natural gas in the Nizhnekamsk cluster would approach 3 billion cubic metres a year, of which 1,477 million cubic metres a year would fall on the production of TAIF Group.

With the support of the leadership of the republic and Gazprom PJSC, TAIF took up the solution of the problem. At the expense of the financial resources of the Group of Companies, large-capacity gas distribution pipelines were built. The project took 17 months to implement and cost TAIF 4,3 billion rubles. At the beginning of September 2020, the solemn ceremony of commissioning the new high-pressure gas pipeline GRS No. 2 Yelabuga (Central) — Nizhnekamskneftekhim PJSC was held.

“The commissioning of this gas pipeline is a long-awaited solution to the long-term problems of providing the growing needs of enterprises of Nizhnekamsk Industrial Hub, in particular TAIF Group, with additional volumes of gas, and radically solves the problem of ensuring reliable gas supply from two independent sources," said Ruslan Shigabutdinov, the director general of TAIF JSC.

“This gas pipeline is our dream. We took different approaches to solving this problem, and we already added as much as we could. But there was no further development. And the step taken by TAIF Group — building at their own expense — it means a lot. The most unique and latest technologies that meet all environmental standards. And most importantly, we have great prospects for further development of Nizhnekamsk Industrial Hub," Rustam Minnikhanov said in his speech at the gas pipeline commissioning ceremony.

Economics, ecology, social responsibility

These are the three components of the effective development of any, including the most large-scale business. Increasing the efficiency and scale of production, it is simply impossible not to think about how to preserve the environment — the territory where people live. Those are the very people who work every day from year to year in the industries, ensuring their development.

From the moment of its foundation and throughout the entire activity of TAIF-NK JSC, the company pays increased attention to environmental issues (for which it is almost annually recognised as an ecolider at republican and federal competitions), is among the top 100 socially responsible companies in Russia.

In addition to constantly improving the quality of products and, first of all, fuel — aviation, jet, automobile, installation of vapor recovery systems on filling equipment and gas station network facilities, the company's production facilities constantly work to optimise the consumption of heat and electric energy, modern technologies are being introduced that allow to get a greater effect with less energy intensity of processes.

In 2014, the works began on the reconstruction of the local industrial wastewater treatment plant, built back in 1978. Solemn ceremony of the official commissioning of the updated BTF with the participation of the President of Tatarstan and the management of TAIF JSC was held in mid-June 2017.

The use of activated sludge in combination with mechanical filtration in a membrane bioreactor allows for the removal of 99,99% of all pollutants from wastewater. For the first time in Russia, the entire volume of wastewater after treatment began to return back to production, thereby eliminating the water intake from the Kama River and, equally important, the discharge of even treated wastewater back into the reservoir. The effectiveness of the technology used was demonstrated to the president of Tatarstan at the commissioning ceremony by the director general of the company at that time, Rushan Shamgunov, without any doubt drinking a glass of water that had passed all the stages of purification in the new treatment plants.

The state of the environment on the territory of the production facilities of the oil refining complex itself is strictly monitored by its own sanitary and industrial laboratory. In 2015, the structure received an official confirmation of technical compliance with the requirements for the laboratory for conducting the necessary tests. The laboratory specialists control the main environmental factors: atmospheric air in the territory of the sanitary protection zone and in the zone of influence of flares, ground, underground, stormwater, sewage, soil, emissions of pollutants at the sources of atmospheric pollution and on the territory of the enterprise, providing the company's management with complete and reliable research results.

TAIF-NK provided significant assistance in carrying out major repairs and equipping the children's infectious diseases hospital of Nizhnekamsk and the children's polyclinic Solnechnaya with new equipment. The company is included in the Book of Benefactors and was awarded a letter of thanks from the Vozrozhdenie Republican Fund for its active participation in the restoration of the ancient city of Bolgar and the island-city of Sviyazhsk, the construction of the Bolgar Islamic Academy and the reconstruction of the Cathedral of the Kazan Icon of the Mother of God. It is a regular participant of the republican campaign “Helping To Get Ready For School”, since 2013, it has taken part in the implementation of the project KeDetstvo.

The oil refining company also pays attention to the development of sports. For the past 10 years, republican karting competitions for the TAIF-NK Cup have been held in Kamsky Polyany, which are gaining popularity from year to year and are already claiming the status of at least an open tournament of the Volga Federal District. The employees of the complex are regular participants of the traditional race “Ski Track of Russia” and ski races for the TAIF-NK Cup in winter, and in summer — the race “Cross of Nations”; they are actively fond of skating and playing football, volleyball, paintball, table tennis.

Over the years of the company's activity, its employees have planted tens of thousands of trees, TAIF-NK is a regular participant in environmental actions, subbotniks and monthly events.

In taking care of its employees, the company helps their professional growth, providing the opportunity for specialised training, retraining and advanced training.

Besides, with the approval and support of the shareholders and the management of TAIF JSC, the company implements two corporate housing programmes, allocating hundreds of millions of rubles for these purposes. Thanks to this, thousands of employees of the company had the opportunity to use both interest-free loans for the purchase of their own new comfortable housing, and a mortgage.

TAIF-NK remains one of the leading oil refineries not only in Tatarstan, but also in Russia. The complex today includes an oil refinery, gasoline plant and the Heavy Residue Conversion Complex. Despite the difficult economic situation in Russia, TAIF-NK continues to develop, increasing economic efficiency, confirming the high quality of its products from year to year. Achieving even higher results, the oil refining complex of TAIF Group also gets new opportunities to direct more forces and funds not only to the further development of production, but also to socially significant programmes and good deeds.