Pavlodar Oil Chemistry Refinery

Upgrading Project

1971 – start of construction;

1978 – start-up and commissioning;

Since August 2009 – POCR LLP entered the Group of Companies of

“NC KazMunayGas” JSC.

General designer:

• 1971 – 1986 – “Giprogrozneft” (City of Grozny);

• since 1986 – Omskneftehimproekt OJSC (Omsk).

Design capacity – 6 mln.tons per annum;

Processing depth – 85%

Structure of the Refinery:

Name of products

• Motor gasoline, grades

RON 80, RON 92, RON 95, RON (K2);

• Jet fuel (ТС-1);

• Diesel fuel (K2 winter type, summer type);

• Fuel oil. Mazut;

• Petroleum Bitumen (structural, roofing, paving);

• Hydrocarbon liquefied fuel gas;

• Technical sulfur;

• Petroleum coke, not calcined;

• Vacuum gasoil.

History and Structure of the Refinery

2

Name of units Capacity mln.tons per year

Complex LK-6U (1978)

CDU (ELOU-AT) 6

Gasoline hydrotreating 1,2

Catalytic reforming 1

Diesel fuel hydrotreating 2

Gas fractionation 0,45

Complex KT-1 (1983)

Vacuum distillation of mazut 4

Vacuum gasoil hydrotreating 2,4

Catalytic cracking 2

Absorption and gas fractionation 1,25

Waste-heat recovery -

Bitumen Production unit 0,5

Sulfur Production unit 25 th. tons/year

Delayed Coking Unit 1

Hydrogen Production Unit 31 th. Tons Nm/h

Scheme of main crude oil pipelines Russia-Kazakhstan-China

Atasu

supply from RussiaSupply of the Kazakh crude

Yurgamysh

Pavlodar

Atyrau

Samara

Omsk

Kenkiyak

KarakoinKumkol

Shymkent

5 mln.tons

• Agreement for transit of 7 mln. tons of crude oil.

• The Kazakh section of TON-2 (Tuimazy – Omsk – Novosibirsk-2) -185,6 km

• Increase in carrying capacity from 7 up to 10 mln. tons per year

(replacement of TON-2 pipeline section). The project cost - 32 billion of

Tenge

UfaTuimazy Crude oil quality

deterioration:

Sulfur- 1,6-1,8 %

• Kumkol

Kuatamlonmunay, Kazgermunay, Turgay Petroleum,

KazPetrolGroup, NC KOR, Souths-Oil.

• Kenkiyak

СНПС-Aktobemunaygas, Kazakhoil-Aktobe, Ada Oil

company, Alties Petroleum Ent. B.V.

The Kazakh section TON-2

3

Crude oil extraction, export and processing over 2012-2016 (plan) (mln.tons)

79.2 81.7 80.8 79.4 77.472.9 72

62.2 60.9 60

14.2 14.2 14.9 14.1 13.6

0

10

20

30

40

50

60

70

80

90

2012 year 2013 year 2014 year 2015 year 2016 year

Extraction

Export

Processing

5.03 5.01

4.84.7

4.8 4.8

5.06

4.5 4.34.4 4.4

4.9

4.6

3.8

4

4.2

4.4

4.6

4.8

5

5.2

2012 year 2013 year 2014 year 2015 year 2016 year

POCR

PKOP

Atyrau Ref.

Crude Oil Processing in refineries of Kazakhstan over 2012 -2016 (plan) mln.tons

4

Crude oil balance over 2010-2015 years (mln. tons)

Crude oil balance 2010 2011 2012 2013 2014 2015

Opening balance (changing) 3 498 4 776 5 121 3 228 4 706 6 876

1. Extraction of oil and gas condensate79 686 80 060 79 215 81 789 80 826 79 457

1. Import 7 047 7 751 6 094 7 037 0 0

2. Export 71 085 71 845 72 989 72 077 62 273 60 950

via pipeline 53 900 55 618 54 575 56 771 54 460 56 965

incl. Atyrau-Samara 15 100 15 427 15 432 15 375 13 885 13 490

incl. Caspian Pipeline Consortium 28 700 28 085 27 903 28 712 35 026 38 015

incl. Atasu - Alashankou 10 100 10 893 10 400 11 828 4 831 4 794

incl. Karachaganak Petroleum Operating-

Orenburg0 1 211 838 856 718 666

across marine port of Aktau 8 785 7 982 7 064 6 269 5 487 3 171

by railway 8 400 8 244 11 349 9 034 2 325 814

3. Transit of the Russian crude oil

(Rosneft) 6 985 6 900

4. Processed at refineries of

Kazakhstan13 682 13 725 14 213 14 296 14 911 14 171

The Kazakh crude oil processed 7 349 7 313 8 229 7 340 9 985 9 361

The Russian crude oil processed 7 021 7 155 5 983 6 956 4 926 4 810

5. Balance of crude oil 4 776 5 121 3 228 4 706 6 876 10 754

6. Processed by mini-refineries 688 1 321 881 975 1 472 833

5

• Eni S.p.a, APS Engineering – FS development

• Technip S.p.a, Kazgiproneftetrans, VNIPIneft JSC – front end engineering

design development

• Omskneftehimproekt PJSC – development of detail documentation

• UOP (England) – Vacuum Gasoil Hydrotreating, Catalytic Cracking,

Isomerization and Naphtha Splitter.

• Siirtec Nigi (Italy) – sulfur recovery and tail gas treatment

• Rominserv S.R.L. (Romania) / Vladimirteplomontazh – ЕРС-contractor for

Isomerization and Naphtha Splitter

• NFC (China) – ЕРС contractor of Sulfur Recovery Complex

• Haldor Topsoe (Denmark) – hydrotreating of naphtha, hydrotreating of diesel

fuel and kerosene

Project mission:

Production of motor fuels of environmental class К4, К5

according to requirements of the Technical Regulation of the

Customs Union.

Main financing figures of the

Project:

Total cost of the Project -

616 mln. US dollars

PBР – 10 years;

IRR – 4,12%

Pavlodar Refinery Upgrading Project

Start of commissioning works – May 2017.

Completion of commissioning works – July/August 2017.

Completion of reconstruction and production of diesel fuel К5 – end of 2017.

6

Companies - partners

Rominserv S.R.L/ Vladimirteplomontazh/NFC

Cost of scope of work - $ 616 million

Feed – West-Siberian crude oil

New units:

Isomerization unit (571 th. t/ year);

Naphtha Splitter (1961 th. t/ year)

Sulfur recovery unit and tail gas treatment

Amine regeneration unit

Sulfur granulation unit

Sour water stripper (2 lines)

Automated gasoline blending station

2 isomerate tanks

Utilities and Offsites

Reconstruction of the existing units

− CDU (ELOU-AT) (capacity – 6 mln. t / year);

− Catalytic Reforming (capacity – 1 mln. t / year);

Licensor UOP

− Vacuum Gasoil Hydrotreating (capacity – 2,4

mln. t / year);

- Catalytic cracking*

*capacity increase from1 200 up to 1 900 th.t/year. 2003 reconstruction was made with capacity

decrease from 1925 to 1200 th. t /year.

Licensor Haldor Topsоe

− Naphtha Hydrotreating

− DHT and KHT (capacity – 2 mln. t/ year/ 364

th. t/year).

ЕРС Rominserv S.R.L

Cost of scope of work - $ 1072 million

Feed – West-Siberian crude oil/ the Kazakhstani crude oil

New units:

Licensor UOP

Hydrotreating and dewaxing of diesel fuel, kerosene

fraction;

LPG teratment (Merox) ;

Isomerization unit (571 th. t/ year);

Naphtha Splitter (1961 th. t/ year);

Licensor Siirtec Nigi

Sulfur recovery unit and tail gas treatment

Not licensed units

Amine regeneration unit

Sulfur granulation unit

Sour water stripper (2 lines)

Automated gasoline blending station

Automated fuel oil blending station

Utilities and Offsites

18 new tanks

Reconstruction of existing units

− CDU (ELOU-AT) ( capacity – 6 mln. t/year);

Licensor UOP

− Catalytic Reforming (capacity – 1 mln. t/ year);

− Conversion of the existing DHT to Coker Naphtha

Hydrotreating;

− Hydrotreating of vacuum gasoil (capacity – 2,4 mln.

t/year);

− С-200 – Catalytic cracking (capacity – 1,9 mln. t/ year);

- 456 mln.$

Reasons for

optimization

Prolongation of the

Agreement between

Russia and Kazakhstan

for crude oil supply

SWAP-operations not less

than 7 mln. t/ year

Guaranteed supplies of the

Russian crude oil

Project Optimization

No need to process the

Kazakhstani crude oil

Worldwide deterioration

in economic situation

1

2

7

Pavlodar Refinery Upgrading Project

Pavlodar Oil Chemistry Refinery LLP

Cost of scope of work - $ 284 millionRominservS.R.L / Vladimirteplomontazh JSC

Cost of scope of work - $ 332 million

Sulfur Recovery Complex:

Sulfur recovery unit and tail gas treatment

Amine regeneration unit

Sulfur granulation unit

Sour water stripper (2 lines)

Isomerization Complex:

Isomerization Unit (571 thousand t/year);

Naphtha Splitter (1961 thousand t/year);

Reconstruction of the existing units

Utilities and Offsites

Utilities and Offsites

Total cost of project implementation - 616 mln. USD

8

Licensor and Basic Design Developer -

UOP (England)

Project development – Technip (Italy)

EPC contractor –

Rominserv S.R.L. (Romania) / Vladimirteplomontazh JSC

Isomerization Unit - 571 000 t/ year

Naphtha Splitter Unit - 1,961 mln. t/ year

Product – component of motor gasoline (isomerate)

Commissioning – 2017

Complex of Isomerization and Naphtha Splitter Units

9

May 2015 April 2016 November 2016

Chronology of construction. Isomerization Complex

October 2015 November 2016April 2016

Start of construction – May 201510

Concrete works- 95%, installation of metal structures - 98%, installation of equipment- 97%

March 2016 July 2016

Chronology of Utilities and Offsites Construction

June 2016 November 2016 June 2016

Start of construction – March 2016.

November 2016

Main Control Room

Implemented U/O objects:

Cooling water system and water towers, plant air and instrument air unit, caustic supply and removal system, fire-fighting

system, nitrogen distribution system, flare system, interconnecting racks, system of demineralized water and condensate return.

Plant Air and Instrument Air Unit

11

POCR – Client

NFC (China) – ЕРС Contractor

Siirtec Nigi (Italy) – Licensor and Basic Design

Developer

Capacity - 60 000 tons/year

Commissioning – 2017

Complex of Sulfur Recovery Units

Composition of complex:

Sulfur recovery unit and tail gas treatment

Sour water stripper (2 lines)

Amine regeneration unit

Sulfur granulation unit

12

August 2015 January 2016

Chronology of construction. Complex of Sulfur Recovery Unit.

March 2016 November 2016 July 2016

Start of construction – August 2015

November 2016

13

Concrete works - 96%, installation of metal structures - 99%, installation of equipment - 97%

Reconstruction of LK and KT complexes

Column К-301 (LK-6U)

Replacement of 23 sets of valve trays.

Producer: KOCH GLITCH

Column К-102 (LK-6U)

Replacement of 23 sets of valve trays.

Producer: KOCH GLITCH

Reactors of Vacuum Gasoil Hydrotreating

Replacement of 2 reactors.

Producer: Volgogradneftemash

In accordance with UOP Basic Design reactors of vacuum gasoil

hydrotreating were replaced

14

FCC Reconstruction based on UOP Technology

Works within shutdown period of 2016:

• Replacement of internals of the main FCC

rectification column

• Assembly of domes with cyclones

• Works on lining

Plan of works within shutdown period of

2017:

• Replacement of dome with cyclones in

reactor-regenerator section

• Replacement of feed injection to reactor

UOP – licensor of the process, developer of Basic Design

NEFTEHIMPROEKT CJSC – detail documentation designer

Grif management – supplier of the main equipment for reactor-regenerator section

HASON – authorized manufacturer of UOP

EMTROL-BUELL – technical support of equipment manufacturing

OMUS-1 – Executor of construction and assembly works

15

Production of internal devices for reconstruction of reactor-regenerator section

of catalytic cracking at HASON plant

Hason – authorized manufacturing plant according to UOP recommendation

16

Hason plant manufactured:

8 two-stage cyclones of regenerator

6 one-stage cyclones of reactor

Segments of dome parts and receivers of reactor and regenerator

Regenerator air distributor

Replacement of heads of reactor and regenerator with collection chambers

and groups of cyclones

Replacement of ballistic separator of reactor R-201 with vortex

separation system, replacement of riser section Replacement of cascade trays of stripper section of reactor R-201 with AF

packing systemReplacement of reactor steam distributorsReplacement of Y-shaped section of reactor, reactor feed distributor

Replacement of remaining part of lining

Replacement of overhead line №201 of reactor R-201

Replacement of gate valves and hydraulic drives of transport lines

Replacement of air distributor of regenerator

Mechanical works

Application of lining to new domes and

collection chambers of reactor R-201

and regenerator R-202

Planned scope of lining replacement

Additional scope of lining replacement

Lining replaced in 2015

Replacement of lining in 2016 :

Replacement of the remaining lining in 2017

Works on replacement of lining

Reconstruction of Catalytic Cracking based on UOP technology

Work on replacement of lining is performed

by Aliter Axi

Reconstruction of reactor-regenerator section. Internal devices are going to be replaced with application of lining without

replacement of apparatus casing

17

Production of jet fuel with

sulfur content less than 10

ppm

Reconstruction of Hydrotreating Units based on Haldor Topsoe technology

New equipment 25 units

Vessel 4

Heat-exchanging

equipment4

Heat-exchanging

equipment7

Heaters 2

Rectification column 1

Filters and internals 7

Increase in productivity up to 1,2 mln.

tons per year;

Preparation of feed for isomerization

unit and catalytic reforming):

New equipment 7 units

Vessel 1

Pumping equipment 2

Heat-exchanging

equipment2

Feed filters 2

Guarantee of diesel fuel

production (summer type) of K5

ecological class

New equipment 13 units

Reactor 2

Vessel 4

Pumping equipment 4

Heat-exchanging

equipment1

Feed filters 2

Naphtha Hydrotreating Diesel fuel Hydrotreating Kerosene Hydrotreating

Rectification column K-202 of Naphtha

Hydrotreating Unit18

Transportation Route of DHT Reactors

Mipo Port

Novyy Port

4 000 km

10 000 km(5,500 miles)

POCR jetty

jetty

POCR

Total length is 14 000 km

19 km

17th of July

25th of August

2nd of October

Manufacturer –HYUNDAI HEAVY INDUSTRIES 19

Delivery of diesel fuel hydrotreating reactors

17th of July shipping of reactors, Mipo port, South Korea

19th of September completion of foundations assembling

25th of August transshipment of reactors to river barges

2nd of October delivery of reactors to temporary jetty

20

Conclusion

Completion date and quality of products

Implementation of POCR Upgrading project shall be finished in 2017 with production of motor fuels of К4

and К5 ecological classes (analogue of Euro 4 and Euro 5).

Technologies

In the process of Pavlodar Refinery Upgrading the advanced technologies and experience of leading

worldwide companies were applied.

Project optimization

Optimization allowed reducing of capital expenses by 456 mln. US dollars.

Training and experience exchange

To maintain new units there was 161 new workplaces created. The personnel was trained and had

extension courses in the refinery (Atyrau), in Yokogawa offices, on simulating equipment of NFC (China)

and T-soft (St.-Petersburg).

The refinery staff has got the experience in upgrading project management for crude oil processing.

21

Thank you for your attention!