Aleksey Kovalenko: Focusing on production and employees’ well-being

The LUKOIL Group, one of the world’s largest international oil and gas companies with businesses located in over 30 countries worldwide, integrates four refineries in Russia along with three refineries in Europe. In Romania, PETROTEL-LUKOIL – located in Ploiesti, Prahova County, is one of the country’s largest oil refineries and also one of the largest in Eastern Europe. We talked to Mr. Aleksey Kovalenko – the new President of the Directorate and General Manager of PETROTEL-LUKOIL, about the company’s latest developments, modernization programs to meet growing demand for high-quality fuels and this year anniversary of the refinery.

 

Dear Mr. Kovalenko, you have been quite recently appointed General Manager of PETROTEL-LUKOIL – on 1 December 2018. Yet your business experience covers more than 25 years in the refining industry. What is your perspective on the status and latest developments of this long-standing facility in Ploiesti? What is the refinery’s market positioning on national and regional level today?

Aleksey Kovalenko: PETROTEL-LUKOIL holds a top position on the domestic and regional market, with a market share of around 20%, delivers its high-quality products on the domestic and foreign markets (produces gasoline, diesel, liquefied petroleum gas, propylene, MTBE, as well as and coke and sulphur, according to European standards). It is the third largest refinery in terms of production volume, but from the point of view of its complexity, it holds a leading place among refineries.

LUKOIL has a constant investment program for the PETROTEL refinery, one of the top refineries of the group, with BAT (Best Available Techniques) either American of French, which have basically recreated an old traditional refinery, leading to a refinery with maximum efficiency (today the processing depth is somewhere at 99.5%). LUKOIL Group President awarded a prize to the PETROTEL refinery in 2015, for its segment of activity and for the use of these innovative technologies. At group level, we have even formed an elite body of specialists, with whom we manage to implement these technologies that are effective at PETROTEL, at the Russian refineries of our company.

We continue to develop the PETROTEL refinery, with a special focus on environmental technologies and constantly improving what we have today, because this is the current trend, you need to keep up with the ever-changing technologies or which bring other innovations. For me personally, starting from a large-capacity refinery in Russia (LUKOIL Nizhegorodnefteorgsintez Refinery), PETROTEL-LUKOIL is, however, a challenge for these changes: how to make it more innovative, more energy efficient, more cost effective, more competitive in the market… We want a refinery that responds at the moment to some of the highest European and, why not, international standards.

Thus, during the reconstruction period (2005-2016) the total investment in technologies was about USD 400 million.

 

In February 2018, PETROTEL-LUKOIL announced major investments exceeding USD 30 million by 2020, in order to improve environmental performance. On 11 December 2018, you also made public the most important investment decisions of the company for the following period. Thus, by 2021, the refinery will benefit from other approximately USD 100 million, amount allocated to projects aimed at reducing operating costs and optimizing technological processes, with a positive impact on the environment. Could you please tell us more about the upgrading process to reduce emissions to zero?

Aleksey Kovalenko: The zero emissions concept cannot be applied to a refinery because of the existing technological level. At the level of the European Union, the legislative framework for emissions minimization is created by implementing Best Available Technologies – BAT. These technologies are also implemented at PETROTEL-LUKOIL, and beneficial environmental results have been seen each time. The further minimization of pollutant emissions depends on the evolution of refining technologies, as well as on the applicable legislation regulating the competitive environment.

The refinery is making efforts to continuously minimize emissions from technological processes, and also remain competitive on the market. The investments underway are currently focused on the Coking Plant and the Sulphur Recovery Complex. Both projects have a positive impact on the environment. Modernization of the Coking plant will reduce the emissions of volatile organic compounds to zero, which at the refinery level will mean a decrease by 2-3%. Even if at first glance it does not seem to be significant, we should mention that these emissions mean a significant reduction in the degree of olfactory discomfort of the population.

Also, the new Sulphur Recovery Complex, in addition to eliminating the emission potential of sulphur compounds in case of technical incidents, will also reduce fugitive emissions. By working alternately with two plants, it is much easier to carry out the maintenance activity, with a direct effect on the reduction of diffuse emissions of sulphur compounds.

At this time, PETROTEL-LUKOIL is in the process of mounting two air quality monitoring stations in the area of influence, in order to develop procedures regulating the activities on the platform, so as to minimize the impact on the population, even in the most unfavourable weather conditions.

 

What benefits has the modernization of installations brought, both economically and by providing a cleaner environment for the community?

Aleksey Kovalenko: Any technological modernization has positive effects on the environment as well. As mentioned above, investments that are underway will reduce emissions of volatile organic compounds by 2-3% and will exclude the risk of accidental emissions of sulphur compounds. The economic effects will result from the possibility of diversification of raw materials resulting after the completion of projects.

 

In order to produce petroleum products in line with European standards and to improve the issues related to industrial safety and energy efficiency, PETROTEL-LUKOIL reported a 6% reduction of greenhouse gas emissions in 2015. What is the current situation?

Investments in recent years have been less focused less on energy efficiency and more on the environment, so the level of specific carbon dioxide emissions has only slightly declined (0.3-0.5% per year). We still have the potential to improve energy efficiency, which will eventually also be seen in reducing carbon dioxide emissions.

 

What do you believe each refinery priority objectives should be? What are your main focus areas for the upcoming years?

Aleksey Kovalenko: I think safety is a priority of any refinery. Industrial safety, environmental safety, human safety. Practically, they all converge from the professionalism of our teams and observing the cumulative rules for the technologies used, for security and health at work, for the environment. The PETROTEL-LUKOIL refinery, for example, has more than 115 years of existence, in the past it was somewhere far from the city, today the city, due to the increase in population, has changed its size and has come with its neighbourhoods very close to the refinery. For this reason, the refinery permanently makes investments in environmental technologies (such as the BELCO plant, for example, dedicated to the reduction of SOx, NOx, such as the investments we have already mentioned above); it also maintains permanent communication with the direct factors involved in what the environment means, because we are not separated from this reality, but we are part of it – we live here, we work here, so we want the same thing, that this refinery be ‘a friendly environment’ from all points of view: environment, industries, to be socially oriented towards the community with which I believe we have good relationships through everything that has been done over time. And we want a ‘home’ as clean and comfortable as possible and, frankly speaking, we are part of this community, so we cannot afford to ‘play’ with safety and with all that can result from here, due to a lack of focus on this segment.

 

What are the strategic directions of the refinery development in the next period of time?

Aleksey Kovalenko: Although the refinery fulfils all the conditions imposed by the BREFs and Decision 2013/84/EU establishing Best Available Techniques (BAT) conclusions under Directive 2010/75/EU of the European Parliament, investment in technology, and, in particular, environmental investments will continue and we will make them public every time.

For the next stage, besides the current re-equipping, besides the turnaround this spring (about USD 7 million invested during 6-31 March), the refinery has planned to invest in two major projects that will have a positive impact on ambient air:

• Upgrading the Coking plant – Stage I (USD 7 million), a project that will reduce process emissions to zero (deadline: 2020);
• Construction of a new sulphur recovery complex (USD 25.9 million), which will virtually reduce to zero accidental emissions of sulphur oxides in the event of technical incidents or failure (deadline: Q1/2020).

As a future action, everything that is being invested and all that is done is aimed at industrial and environmental safety, the reliability and efficiency of processes, and social responsibility is what we want to maintain not necessarily in terms of numbers and statistics, but as real involvement in community life and respecting its needs. We will soon implement grants, an improvement in the sponsorship program we have previously used to build playgrounds and to support education. Until now, this involvement has been materialized through financial support for some colleges and the Petroleum-Gas University of Ploiesti, funding competitions or talented young people without great financial possibilities, environmental programs – ecological education: ‘Eco-Attitude’, ‘Think green, think clean’, afforestation of areas for which perhaps there was no interest at some point. We are considering grants that will bring opportunities for the local and national community.

 

This year PETROTEL-LUKOIL marks 115 years of existence. What would be your message for the employees and business partners on the occasion of this anniversary?

Aleksey Kovalenko: 115 years means an entire history. First of all, the employees of PETROTEL-LUKOIL refinery should feel proud to be part of this history book; moreover, today we have one of the most modern refineries, its Nelson index is 10, which is justified not only through the high volume of investments, but first of all through the effort of the employee teams, which keep the refinery in the optimal parameters.

I would like, first of all, to thank the employees and partners of the refinery for continuously supporting the refinery’s goals, for trusting in its development prospects, because technology without people is worthless. I want to assure them of the company’s openness and support for all aspects – professional or personal, of their lives. LUKOIL is primarily a company focused not only on production but also on its employees and their families. The company runs annual professional training programs, employee rotation, as well as programs for employees’ families, competitions and chances for a safe future for their children. We want people to come to the refinery not from the need to have an income, but also out of pleasure, this being like a second home, as it is for many of us.