Russian version

November 26, 2013    «Neftegas INTERNATIONAL» magazine, October 2013.

TAIF-NK PSC: From Development Strategy To Effective Result

Petrochemical complex in Tatarstan is the most innovative active sector of the Republic economy. One of the leading places in the complex belongs to the TAIF- NK – modern perspective company of Oil Refining Industry, is actively implementing innovative projects and developing new high-tech productions.

Stages of Growth.

For many years the governmental energy strategy of Russia has been providing the raw vector development of the country. Tatarstan Republic, which is leading in oil production in Russia, has remained only as a supplier of raw materials for more than half century. The absence of oil refining industry as a major technological element affected the region’s whole economy and as a consequence, affected the development of the whole country. TAIF PSC created its own branch with basic system of primary atmospheric distillation of crude, which produced a small range of products: straight-run gasoline for ethylene production, fuel with high sulfur content and boiler fuel – TAIF-NK on territory of Nizhnekamsk industrial area in 1997 with purpose of implementation of these tasks. Today the Company is the leader of the oil refining sector of Oil, Gas and Chemistry Complex of Tatarstan Republic. The basis of TAIF-NK strategic initiatives is consisted of development and widening of Oil refining industry. Continuous innovative activity aimed at broadening the range of of products, increasing the proportion of light products, growth of raw materials processing and improvement of economics indicators. Active research for perspective technological solutions was done. While this, advanced foreign and national technologies were used. The Company's development rates were unusually high. Large-scale construction projects of Gasoline Plant and Gasoline Condensate Processing Plant began in 2003 and started operating in 2005, two months later the first portion of gasoline that was consistent with all project requirements was produced. Raw materials capacity of the Company was increased by 1 million tons in 2006 after the start of Gas Condensate Processing Installation. The Company seriously increased its products range in 2007: raw materials for petrochemical industry, jet fuel, technical kerosene, diesel fuel, EURO-2 and EURO-4 motor gasoline. By 2008, the Company was among the first in Russia to completely pass to the EURO-4 quality standard motor gasoline production. Dynamic development, improvement of technological process and innovation management contributed the business growth of the Company. TAIF-NK is a modern Oil refining Complex today, which is completely consistent with global industry trends. It brings together the largest Oil Refining Plant in Tatarstan republic, gasoline plant and Gas Condensate Processing Plant. The whole range of TAIF-NK products, which includes 25 items: gasolines, jet and marine fuel, diesel fuel, road bitumen, liquefied petroleum gases and others have high competitiveness. The Company realizes the program of own retail sales network development, which makes it possible to provide the population with quality fuel. Key indicators of activity reflect the effectiveness of the chosen direction of development: the percentage of the Company in the total amount of crude oil processing in Russian Federation in 2012 was to 3.1% and 53.7% in Tatarstan republic. TAIF-NK is in top ten of country’s Oil refineries according to the volume of processing.

For the 1st half of 2013 in TAIF-NK:

  • 4367.8 thousand tons of raw materials processed;
  • output products in the amount of 64.1 billion rubles produced;
  • products in the amount of 65.5 billion rubles sold;
  • $4.7 billion net profit;
  • percentage of exports in sales was - 61 %;
  • the depth of raw material processing - 75.68%

Excellent Level of Quality

The important position in the development strategy of the Company is taken by technological improvement of oil refining capacity, what is fully consistent with the Government of Russian Federation policy in modernzation of all oil refeneries of Russia. TAIF-NK consistently works on implementation of new technologies. The result of one of the active production modernization directions was the fact of switching to production of EURO-5 European Quality diesel fuel and stopping the production of lower quality diesel fuel. The Company was one of the first in Russia to start production of this fuel, going ahead of the Government schedule of passing to producton of high quality fuel.

Phases of bringing the diesel fuel production to the highest quality level:

  • 2006 – developing a plan of rising the diesel fuel level;
  • 2008 – (together with British Company – Criterion Catalyst) – reconstruction of middle distillates hydrotreating installation was completed. Volume of hydrotreating catalyst has increased by 10%. Catalyst system was replaced totally. It became possible to produce EURO-4 standard fuel in volume of 1.65 million tons per year;
  • 2010 – (together with Dutch Company – Shell Global Solutons) – inclusion of additional reactor, reconstruction and installation of several new units. Capacity of hydrotreating installations increased by 30%;
  • 2012 – start of running the commercial operation installation, bringing it to its full capacity (2.0 million tons per year) and shipping the first batch of EURO-5 standard diesel fuel.

Sulfur content in class «5» diesel fuel is minimized – less than a thousandth of a percent. Due to the low content of aromatic hydrocarbons and sulfur, the opacity of exhaust gases decreases, the emission of harmful products of combustion to the atmosphere reduces. High cetane number allows the new product to optimize the the combustion of the fuel mixture in the engine. TAIF-NK diesel fuel is supplied to native market – 58 regions of Russia, and forexport – fourteen European countries. EURO-5 standard fuel has already replaced the EURO-4 standard diesel fuel in the «North» oil pipeline, which delivers it to Primorsk harbour from Nizhnekamsk. It is planned to ship the 67% of the whole amount of product for export and 33% of it for native market this year. TAIF-NK percentage in production of diesel fuel according to the 2013 year first half summary was 96.4% in Tatarstan Republic and 3% in Russia. By the start of ecologically clean diesel fuel production with the capacity more than 2.015 million tons, the Company made a technological step in the economy, social sphere and ecology of new level. Improving the quality of Oil products with high ecological characteristics remains as one of the most important conditions for bringing the Company to modern technical level. Implementation of events under the integrated development program of the Company will be continued during this year. Capacity of Gas oil hydroterating installations will be increased by 2300 thousand tons per year. This event is amied at processing of all of TAIF-NK middle distillates to high quality Oil products, particularly to EURO-5 quality diesel fuel. Plans for 2015 include ensuring the EURO-5 quality for motor gasoline, produced by the Company.

Strategic project

Today, the main problems in the Russian refining industry are low depth of refining and lack of secondary processes, which negatively affects the amount of light products being produced. Transition to innovative development model is the basis of competitive refining industry. The basis of all the implementations of TAIF-NK is striving to European standards. Active use of the latest technologies can effectively improve manufacturing processes to produce a new generation of products and expand its range. TAIF-NK started construction of a new production – Heavy Residue Conversion Complex (HRCC) in 2012. Implementation of this large-scale project with $1.56 billion worth will be an important direction of the Company for the next three years. Opening the complex will increase refining depth from the current 75% to 95% and will make it possible to stop the production of heavy petroleum products such as mazut, gas oil, vacuum residue. The basis of the complex will be a multi-stage hydrocracking installation using the latest technology Veba Combi Cracking. The uniqueness of this technology is combination of two processes: the process of liquid-phase hydrogenation of heavy oil residues (vacuum residue) and the gas-phase process of hydrogenation in conjunction with the fresh vacuum gas oil. In the process of liquid-phase hydrogenation the licensed supplement of KBR company is used. VCC installation raw materials capacity is 2.7 million tons of vacuum residue and 1.0 million tons of vacuum gas oil per year. The complex will also include the installation for the production of elemental sulfur and production of necessary special additives. The technology is very economical due to the low cost of mazut and availability of natural gas (600 million m3 of gas is needed per year). The main products of the Complex - high-quality oil products that can meet the needs of the chemical and petrochemical industry of Tatarstan Republic, Russian Federation, as well as implemented for the export: EURO-5 standard diesel fuel and motor gasoline, jet fuel, high quality nafta, propane and butane gas fraction, sulfur. As a result, the Company’s business profits will increase 1.7-2 times, over 700 new jobs will be created. All produtcs, manufactured in HRCC will demonstrate improved ecological characteristics, particularly, reduced sulfur content (in the nafta and diesel fuel - a maximum of 10 mg/kg) and aromatic hydrocarbons. This is a factor of the positive impact on the environment. The project of the complex is expected to implement advanced energy saving technologies, and develope activities that would reduce the negative impact on the environment from both designing objects, and from the Company's existing plants. This unique project is strategically important for the development of the region and for the oil industry of the whole country, because the deepening of refinery all over the country leads to the recovery of economics.

Steps of HRCC construction.

  • December 2011 – a license agreement with “KELLOGG BROWN & ROOT, LTD”, USA, for the Veba Combi Cracking (VCC) is signed;
  • February 2012 – An Agreement on basic design of VCC with the KBR Compan ;
  • October 2012 – A Contract for the supply of the equipment with long period of manufacture with “Toyo Engineering Corporation” Company, Japan;
  • November 2012 – the start of HRCC construction was announced;
  • 2016 – start of all Complex objects’ operating.

Development indicator

Innovation policy and modernization as a strategically important factors in the development of the Company work for a good result. Quality and ecological characteristics of oil products proved by the first palces taken in republican and federal contests "ECOleader", "Best Goods of Tatarstan Republic", "100 best goods of Russia", "Top 100 organizations in Russia. Ecology and Environmental Management.". Behind the high quality and all-Russian recognition there is continuous and laborous work on improvement of both technological and management processes that provide the competitive potential of the Company. Company has implemented an integrated management system and certified it for compliance with four international standards: ISO 9001: 2008 "Quality Management Systems », ISO 14001:2004 "Environmental Management Systems », OHSAS 18001:2007 « Management Systems of Professional Health and Safety" and EN/AS 9100: 2009 "Quality Management Systems - Requirements for organizations of aviation, space and defense industries." TAIF-NK has won the all-Russian contest and was awarded the Prize of the Russian Federation in the field of quality, which is a confirmation of effective functioning of the management system, leading role of the Company in the oil industry and the demonstration of the possibility of production of high-quality and competitive products. The concept of "modern company" does not exist without understanding the issue of social responsibility of business. TAIF –NK PSC traditionally focuses on charity and social orientation. In the past year, the amount of rate on social policy was 376.1 million rubles for charity and sponsorship, 1.3 billion rubles are directed to participation in social prolects. In the priority there are the implementation of housing programs and help to veterans of war and labor, low-income families and people with disabilities, support of culture and sports, help with organizing city activities. This direction will not agree with formal approach – this is an unspoken agreement of the Company’s collective. Participation of TAIF-NK in the Republican events and city activities have always shown high professionalism and a sincere desire to please the residents of the city: if it is the decoration of New Year square - be sure to get a real fairy tale, and if it is the City Day – be ready to watch fun-filled memorable performance. The slogan "Strength for Good " brings TAIF Group togetger and accurately reflects their mission – to contribute directly to improve the economic, social sphere of Tatarstan republic and its population. TAIF –NK PSC is constantly being improved. The company's activities on the level of tasks, quality of results and efficiency is consistent with the basic criteria of the leading Company. Using modern innovative technologies in all ongoing projects is a guarantee to save and raise the competitiveness of the Company's products in the European, Russian and national markets. Achieved results are a springboard for further growth of the Company, the development of which is based on a synthesis of professionalism and understanding of the importance of the tasks given to the entire Russian oil refining industry.

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