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PETROCHEMICAL TERRITORIAL CLUSTER OF BASHKORTOSTAN REPUBLIC The transition to import substitution technologies in oil and gas processing Vil Rishatovich Nigmatullin Deputy director Director of Design department SUE Institute of petroleum refining and petrochemistry of Bashkortostan Republic, PhD Ufa-2015 Slide 2 SANCTIONS IN THE OIL AND GAS INDUSTRY OF THE RUSSIAN FEDERATION July- August 2014 US imposes sanctions against the largest Russian oil company OAO NK Rosneft (OJSC) and the second-largest natural gas producer OAO Novatek (OJSC). Canada imposes sanctions against OAO Novatek (OJSC). US, EU and Norway banned the supply of equipment for deep-water exploration and oil production, works in the Arctic and on shale oil fields in the Russian Federation. September- October 2014 EU, Montenegro, Iceland, Albania, Liechtenstein, Norway, members of the Eurozone restricts access to the capital markets of the EU for companies OAO NK Rosneft (OJSC), OAO AK Transneft (OJSC), OAO Gazprom Neft (OJSC). December 2014 Canada adopts a package of sanctions restricting the export of technology, used in Russia in the oil and gas industries. February- June 2015 Canada includes OAO NK Rosneft (OJSC), PAO Gazprom (PJSC), OAO Gazprom Neft (OJSC), OAO Surgutneftegaz (OJSC), OAO AK Transneft (OJSC) in the sanctions list. July 2015 US imposes sanctions against the key subsidiaries of OAO NK Rosneft (OJSC) in the field of mining (Vankorneft, Neft Aktiv, Orenburgneft, Samotlorneftegaz, Verkhnechonskneftegaz, RN- Yuganskneftegaz), processing (Achinsk, Kuibyshev, Angarsk, Novokuibyshevsk, Syzransky and Komsomolsk refineries) and trading (Rosneft trade limited, Rosneft trading), and RN-Holding, where the assets of the former TNK-BP have consolidated). August 2015 US imposes sanctions against oil and gas South Kirinskoye field in the Sea of Okhotsk (project PAO Gazprom (PJSC)). Slide 3 Oil feed and gas condensate Tar Vacuum gasoil Gasoline Kerosene Diesel fuel Motor gasoline component H2SH2S H2SH2S Sulfur Product to the tank farm MTBE Motor gasoline component Diesel fuel to the tank farm HT gasoline Gasoline to HT BBF H2SH2S Commercial fuel oil component Bitumen Coke Base oil Catalytic reforming Domestic technology Domestic catalyst Foreign catalyst Foreign technology Gas AGFU CDU Visbreaking Bitumen production Coke production IsodeparaffinationIsofinishing Oligomerization Base oil production Sulfur production MTBE Alkylation Isomerization Motor gasoline component Catalytic cracking Diesel fuel HT Gasoline HT Kerosene HT VG Hydrocracking Selective treatmentDeparaffinationOil treatment Base oil Deasphalting Asphalt Deasphalted oil to selective treatment Motor gasoline component Aromatic hydrocarbons production Aromatic hydrocarbons TECHNOLOGIES AND CATALYSTS PETROLEUM REFINING (CURRENT SITUATION) Slide 4 TECHNOLOGIES AND CATALYSTS PETROCHEMISTRY (CURRENT SITUATION) Ethylene HDPE, LDPE Ethyl benzene StyrenePolystyrene Propylene Polypropylene Isopropyl benzene Phenol Acetone Butyl alcohols Higher alcohols Plasticizers Other monomers Synthetic rubbers p-xylenePTAPET Benzene from AHC Ethylene glycol Benzene Gasoline fraction BP-85 Pyrolysis Alkylation Phenol production Polymerization Catalytic reforming Toluene Selective distillation Xylene Isomerization Trans alkylation and disproportionation Para xylene extraction PTA Production Polymerization Plasticizer production Oxo-synthesis Gasoline fraction BP-85-180 Dehydration Benzene and toluene fractionation Xylene fractionation o-xylene p-xylene Domestic technology Domestic catalyst Foreign catalyst Foreign technology Slide 5 Dynamics of the engineering services market for the oil and gas complex of Russia in 2006-2013 and forecast up to 2020, billion rubles (forecast is given for inflation of 10% per year) THE AMOUNT OF ENGINEERING SERVICES FOR THE OIL AND GAS COMPLEX OF RUSSIA IN 2007-2020 YEARS market volume (actual and estimated pessimistic forecastbasic forecastoptimistic forecast Source: INFOLines data, RPI Research Strategy Partners, INFOLines calculations Slide 6 Angarskneftekhimproekt Bashgyproneftekhim VNIPIneft Giprokauchuk Giprogazoochistka GUP INKhP RB IKT-Servis Lengiproneftekhim LUKOIL-engineering Neftekhimproekt (Saint Petersburg) Neftekhimproekt (Kazan) NIPI gazpererabotka Omskneftekhimproekt Peton Salavatneftekhimproekt Samaraneftekhimproekt SGNKhP Soyuzkhimpromproekt CB&I Fluor Foster Wheeler KBR Lurgi SNC-Lavalin Technip Tecnicas Reunidas Datas of Inform agency InfoLine The result of expansion of foreign engineering companies - much of the investment in the modernization of the Russian fuel and energy complex is on the development of engineering capacity of foreign countries. DISTRIBUTION OF RF DESIGN MARKET IN OIL REFINING, BASIC PETROCHEMISTRY AND GAS PROCESSING 50/50 Slide 7 PETROCHEMICAL TERRITORIAL CLUSTER OF BASHKORTOSTAN REPUBLIC Petrochemical territorial cluster of Bashkortostan Republic have been created in 2012. Cluster objectives: Creation and development of innovative infrastructure platforms, bringing together the maximum number of competencies in the field of petrochemistry and oil and gas processing. Growth of international competitiveness of Clusters members. Support for small and medium enterprises in the fields of petrochemistry and oil and gas processing Low-tonnage petrochemistry cluster of Bashkortostan Republic and oil and gas engineering cluster of Bashkortostan Republic have entered to petrochemical territorial cluster of Bashkortostan Republic in 2014. Slide 8 BLOCK-DIAGRAM OF PETROCHEMICAL TERRITORIAL CLUSTER OF BASHKORTOSTAN REPUBLIC PETROCHEMICAL TERRITORIAL CLUSTER OF BASHKORTOSTAN REPUBLIC OAO Sterlitamakskiy neftehimicheskiy zavod OAO Sintez-Kauchuk (OJSC) Bashkirskaya sodovaya kompaniya (OJSC) OOO Ishimbaiskiy specializirovanniy himicheskiy zavod katalizatorov (LLC) LOW-TONNAGE PETROCHEMISTRY CLUSTER OF BASHKORTOSTAN REPUBLIC GUP INKhP RB (SUE) GBU RB NITIG AN RB (SFI) OOO Bashplast (LLC) OAO NPO Tehnolog (OJSC) OOO Innovacionniy centr Himtech OOO Sintez TNP (LLC) OOO ZPI Alternativa (LLC) ZAO OZNH (JSC) HTC UAI (LLC) OOO Experimentalniy zavod Neftehim (LLC) OOO NTC Salavatnefteorgsintez and other 60 members ENGINEERING CENTRE of petrochemical territorial cluster of Bashkortostan Republic CENTER OF MULTIPLE ACCESS TO HIGH-TECHNOLOGY EQUIPMENT of low-tonnage petrochemistry cluster of Bashkortostan Republic PROTOTYPING CENTER IN PETROCHEMICAL FIELD of the low-tonnage petrochemistry cluster of Bashkortostan Republic OIL AND GAS ENGINEERING CLUSTER OF BASHKORTOSTAN REPUBLIC GUP INKhP RB (SUE) GUP Bashgiproneftekhim (SUE) PAO Salavatneftekhimproekt (PJSC) OOO BashNIPIneft (LLC) OOO Corporation Uraltekhnostroy (LLC) OOO NPO Ufaneftegazmash (LLC) GUP BashNIIneftemash (SUE) FSBEI HPE USPTU FSBEI HPE Bashkir State University FSBEI HPE USATU OOO IK OZNA-GazInterAvto (LLC) ZAO Neftepromavtomatika (JSC) and other 32 members Slide 9 ENGINEERING CENTER PETROCHEMICAL TERRITORIAL CLUSTER OF BASHKORTOSTAN REPUBLIC Slide 10 Upstream Midstream Downstream Engineering resources of cluster more than 7 000 specialists Profit of cluster members - more than 10 billion rubles per year ENGINEERING RESOURCES AND SPECIALIZATION Slide 11 Engineering Conceptual preliminary study and Master-plan of business development Estimating the cost of the project, economic and financial studies Feasibility study and examination Static and dynamic modeling Examination of production facilities Process engineering design (PED) Providing the own licenses Basic engineering design (BED) Front-end engineering and design (FEED) Design and detailed documentation development Procurement organization Vendor selection, procurement, delivery of equipment and manufacturing inspection Procurement management Selection of third-party licensors and integration of technologies Construction Installation and construction of the production site Construction Project Management Supervising installation Supervision of start-up works and the commissioning procedure Commission and service maintenance Management Project management consultant (PMC) and customer training Acting as general contractor RANGE OF SERVICES PROVIDED BY ENGINEERING CENTER Slide 12 NK Rosneft (OJSC) P ANK Bashneft (PJSC) P Gazprom (PJSC) Gazprom neft (OJSC) Surgutneftegaz (OJSC) P Tatneft (PJSC) P SIBUR Holding (PJSC) P LUKOIL (PJSC) Novatek (OJSC) Z Antipinskiy NPZ (CJSC) Ilskiy NPZ (LLC) Izhevskiy NPZ (LLC) Nizhnekamskneftekhim (PJSC) Mariskiy NPZ (LLC) NNK Khabarovskiy NPZ (JSC) Slavneft-YANOS (OJSC) Technimont S.p.A. APS Engineering Company Roma S.p.A CUSTOMERS Slide 13 Description Feasibility study and estimate Licenses/ basic projects Construction project Reconstruction project Primary processes, residue conversion Oil, gas condensate and their fractions rectification 934013 Delayed coking and coke burning3159 Visbreaking and thermal cracking281017 Bitumen production734111 Deasphalting124 Secondary processes, gas treatment Isomerization and alkylation132 Reforming16 Oil production3371 Elemental sulfur production273 Diesel fuel, vacuum gasoil hydro treatment 2412 Hydro cracking26 REFERENCE-LIST OF CLUSTERS MEMBERS Slide 14 Description Feasibility study and estimate Licenses/ basic projects Construction project Reconstruction project Offsites objects and infrastructure Airport fuel complex133 Fuel station32 Offsites objects2194 Waste water treatment, Oil sludge utilization 44109 Petrochemical processes Monomers production1313 Aromatic hydrocarbons production3 Polymers production41 Storage and transport Refinery tank farm229 Discharge rack21118 Main pipelines317 REFERENCE-LIST OF CLUSTERS MEMBERS Slide 15 Oil treatment for processing Electrical desalting and dehydration degasification removal of hydrogen sulfide and mercaptans Rectification atmospheric and vacuum distillation separation of the products of thermal and catalytic processes gas fractionation Thermal processes visbreaking of tar thermal cracking of oil residue delayed coking of oil residue paving, construction and roofing bitumen production Solvent processes deasphalting of tar selective oil treatment Catalytic processes catalytic reforming isomerization alkylation hydrogen production gasoline hydro treatment diesel fuel hydro treatment vacuum gasoil hydro treatment catalytic cracking hydrocracking Gas treatment amine treatment hydrogen sulfide processing Water treatment Technologies willingness by the Bashkortostan enterprises with partners from other regions of the Russian Federation almost the entire lineup: PETROLEUM REFINING SECTOR REGIONAL COMPLEX OF ENTERPRISES POSSIBILITIES OF OIL AND GAS INDUSTRY LIFECYCLE PROVIDING BY IMPORT SUBSTITUTION PRODUCTS AND SERVICES IN TERMS OF SANCTIONS Slide 16 Design (basic, detail) 100% willingness only by the Bashkortostan enterprises (comfort zone). Engineering (complex engineering, EP, EPC) - 100% willingness only by the Bashkortostan enterprises (comfort zone). Main equipment willingness to almost the entire lineup (more than 90% - comfort zone) by the Bashkortostan enterprises with partners from other regions of the Russian Federation. Pump-compressor equipment dependence on imports (more than 60% - taking into account the revision of existing analogues in the Russian Federation and the organization of industrial production at existing facilities, not critical). Instrumentation and controls, APCS dependence on imports (more than 80 % - risk zone). Catalyst agents - dependence on imports (more than 60% - taking into account the revision of existing analogues in the Russian Federation and the organization of industrial production at existing facilities, not critical). catalytic reforming Isomerization, alkylation hydrogen production gasoline, diesel fuel and vacuum gasoil hydro treatment catalytic cracking, hydrocracking hydrogen sulfide processing Reagents - dependence on imports (more than 60% - taking into account the revision of existing analogues in the Russian Federation and the organization of industrial production at existing facilities, not critical). Construction and installation works - 100% willingness only by the Bashkortostan enterprises. PETROLEUM REFINING SECTOR REGIONAL COMPLEX OF ENTERPRISES POSSIBILITIES OF OIL AND GAS INDUSTRY LIFECYCLE PROVIDING BY IMPORT SUBSTITUTION PRODUCTS AND SERVICES IN TERMS OF SANCTIONS Slide 17 UPSTREAM SECTOR Geological prospecting work -work planning -3D seismic -well survey in open hole -core-drill sampling Well drilling and completion -intentionally deviated hole well-drilling -drilling equipment and technologies -horizontally branched well-drilling partially -completion of a well (different kinds of perforation) -hydraulic breakdown at intentionally deviated wells (there are only the hydraulic breakdown preparation and the development after hydraulic breakdown in Bashkortostan Republic) -well development and start-up -materials for hydraulic breakdown execution (proppant, gel, additives, breakers etc.) -multiple hydraulic breakdown horizontally wells Oil production (well) -packer equipment and drilling control system (multizone selective completion) -measuring systems -pump equipment -maintenance work and workover -remedial cementing -bottom-hole treatment technology -enhanced oil recovery methods -mitigation response in well drilling (corrosion, salts, asphaltene-resin-paraffin deposits) -well field research Technologies willingness by the Bashkortostan enterprises with partners from other regions of the Russian Federation : REGIONAL COMPLEX OF ENTERPRISES POSSIBILITIES OF OIL AND GAS INDUSTRY LIFECYCLE PROVIDING BY IMPORT SUBSTITUTION PRODUCTS AND SERVICES IN TERMS OF SANCTIONS Slide 18 Design (basic, detail) 100% willingness only by the Bashkortostan enterprises (comfort zone). Engineering (complex engineering) - 100% willingness only by the Bashkortostan enterprises (comfort zone). Main equipment and technologies willingness to almost the entire lineup (more than 90% - comfort zone) by the Bashkortostan enterprises with partners from other regions of the Russian Federation. Pump-compressor equipment dependence on imports (more than 60% - taking into account the revision of existing analogues in the Russian Federation and the organization of industrial production at existing facilities, not critical). Instrumentation and controls, APCS dependence on imports (more than 80 % - not critical). Reagents - dependence on imports (more than 60% - taking into account the revision of existing analogues in the Russian Federation and the organization of industrial production at existing facilities, not critical). UPSTREAM SECTOR REGIONAL COMPLEX OF ENTERPRISES POSSIBILITIES OF OIL AND GAS INDUSTRY LIFECYCLE PROVIDING BY IMPORT SUBSTITUTION PRODUCTS AND SERVICES IN TERMS OF SANCTIONS Slide 19 Capacity - 300 thousand tons per year License and basic design: GUP INKhP RB (SUE) Design: GUP INKhP RB (SUE) GUP BGNKh (SUE) PI VNZM (Project institute) 50 positions of equipment 700 positions instrumentations and controls 2000 positions fittings 22 km extent of pipes Design Construction BITUMEN PRODUCTION UNIT GAZPROM NEFTEKHIN SALAVAT (OJSC) Slide 20 200 positions of equipment 1200 positions instrumentations and controls 7000 positions fittings 50 km extent of pipes Capacity - 2,4 million tons per year License, basic design, design, exploitation documentation, main technological equipment procurement, supervision GUP INKhP RB (SUE) VISBREAKING UNIT OAO TANECO (OJSC) Design Construction Slide 21 Capacity - 3,7 million tons per year Basic design GUP INKhP RB (SUE) Design: - GUP INKhP RB (SUE) - NefteKhimInzhiniring (LLC) 119 positions of equipment 1200 positions instrumentations and controls 3400 positions fittings 39 km extent of pipes CDU/VDU-3 OF ZAO ANTIPINSKY NPZ (CJSC) Design Construction Slide 22 Capacity - 30 thousand tons per year License - GUP INKhP RB (SUE) Design: - GUP INKhP RB (SUE) - NefteKhimInzhiniring (LLC) 220 positions of equipment 1025 positions instrumentations and controls 4300 positions fittings 29 km extent of pipes ELEMENTAL SULFUR PRODUCTION UNIT ZAO ANTIPINSKY NPZ (CJSC) Design Construction Slide 23 LOW-TONNAGE PETROCHEMISTRY CLUSTER OF BASHKORTOSTAN REPUBLIC (LTPC RB) PETROCHEMICAL TERRITORIAL CLUSTER OF BASHKORTOSTAN REPUBLIC Slide 24 THE PURPOSES OF LTPC RB Import substitution of petrochemical products Increasing the level and quality of research and exploration works in the field of production of low-tonnage petrochemical products Development of modern high-efficiency and eco-friendly technologies Development of new products, expanding the range of low-tonnage petrochemical products Generation of additional production volumes Increasing the export capacity of Russian industrial enterprises by improving the quality of products Generation of tax revenues from the production increased Slide 25 MAIN TYPES OF PRODUCTS, OUTPUT BY LTPC RB CLUSTER MEMBERS Engine, gearcase, hydraulic oils Drilling additives Additives Asphalt materials Bitumen-polymeric materials Catalysts for petrochemical processing Salting and corrosion inhibitors Epoxy compounds Plastic Reagents for water treatment Plastisols Adhesives Process environment for metalwork Solvents Emulsifiers Demulsifiers Antiseptics Herbicides Bactericides Zeolites Absorbents Antifreeze Vehicle cleaning fluids All-purpose cleaners Polymers Granular polymeric compositions Plastic products Petrochemical equipment Modular pad pumping stations Oil, water, methanol pumping stations Booster pump stations Fire-fighting pump stations Oil metering units Reagent dosing units Complexes of wastewater treatment Water and oil sediment pit Three-product gas and oil separator Flare units Slide 26 THE CENTER OF MULTIPLE ACCESS OF THE LOW-TONNAGE PETROCHEMISTRY CLUSTER OF BASHKORTOSTAN REPUBLIC (CMA LTPC RB) PETROCHEMICAL TERRITORIAL CLUSTER OF BASHKORTOSTAN REPUBLIC Slide 27 PETROCHEMICAL TERRITORIAL CLUSTER OF BASHKORTOSTAN REPUBLIC Networking, geographically distributed center of multiple access to high-tech equipment of the low-tonnage petrochemistry cluster of Bashkortostan Republic (CMA LTPC RB) was established in 2013 on the basis of the cluster members capabilities and resources. The basic company of the center is SUE Institute of Petroleum Refining and Petrochemistry of Bashkortostan Republic. Slide 28 CMA LTPC RB During the period of 2013 2014 more than 70 unique units of scientific-analytical, laboratory and experimental pilot equipment have been delivered Slide 29 UNIQUE FEATURES OF CMA LTPC RB High performance liquid chromatography Gas-liquid chromatography Gas chromatography-mass spectrometry Elemental analysis Emission spectrometry with inductively coupled plasma X-ray fluorescence spectrometry Slide 30 PROTOTYPING CENTER IN PETROCHEMISTRY OF BASHKORTOSTAN REPUBLIC (PTC PC RB) PETROCHEMICAL TERRITORIAL CLUSTER OF BASHKORTOSTAN REPUBLIC Slide 31 PURPOSES OF THE ESTABLISHMENT OF PTC PC RB Increasing the level and quality of research and exploration works in the field of production of low-tonnage petrochemical products Import substitution of technologies and products Development of the prototyping industry in the field of petrochemistry Development of the basic scientific research in the field of prototyping of technologies and petrochemical products Formation of modern material and technical base in the sector of research and development of petrochemistry prototypes Formation of a competitive and well-functioning research and development sector and ensuring its leading role in the processes of technological modernization of the Russian economy in the segment of the petrochemical industry Creation of new workplaces Slide 32 ACTIVITIES OF PTC PC RB Research and development of prototypes, processes, technologies and equipment, facilities, and products of petrochemistry Physical-chemical analysis of raw materials and prototypes of products Experimental and pilot runs for carrying out the chemical syntheses of research and pilot level Developments of prototypes of new products Optimization of process parameters and engineering solutions testing Slide 33 PROTOTYPING STAGES INTERPRETATION OF CHEMICAL COMPOSITION DISCOVERY OF THE PRINCIPAL "IDEA OF THE PRODUCT REPRODUCTION IN LABORATORY CONDITIONS (EVIDENTIARY STAGE) CREATION OF A PILOT TECHNOLOGY Slide 34 EXAMPLES OF THE DEVELOPED PROTOTYPES The prototype of gypsum-free orthosis Turbocast to fix injured areas of the body for fractures, sprains and strains The prototype of "PU Gel" for soft medical antibedsore mattresses Slide 35 EXAMPLES OF THE DEVELOPED PROTOTYPES The prototype of the kinetic sand for children's creativity (modeling) and motor development The prototype of disinfectant - a complex mixture based on hydrogen peroxide and various organic acids Slide 36 EXAMPLES OF THE DEVELOPED PROTOTYPES The development of domestic analogue of the "soil strengthener" in the interests of road construction and military-industrial complex of the Russian Federation. The composition is an emulsion of acrylic polymer with a modular architecture. It is used for preparation of the "road cake" on the roads of the highest category as well as for operational (within a day) preparation of ground temporary roads for the movement of trucks and other heavy equipment on impassable roads. Slide 37 PETROCHEMICAL TERRITORIAL CLUSTER OF BASHKORTOSTAN REPUBLIC Vil Rishatovich Nigmatullin Deputy director Director of Design department, SUE Institute of petroleum refining and petrochemistry of Bashkortostan republic, PhD Ufa-2015 450065, Russian Federation, Bashkortostan, Ufa, Initsiativnaya str., 12 tel/fax: +7(347)242-25-11, +7(347)242-24-73 E-mail: inhp@inhp.ru