OREANDA-NEWS. Grupa LOTOS S.A. has embarked on its new project to expand the refinery’s deep conversion capacities (the EFRA Programme). Under the programme, LOTOS Asfalt, a company of the LOTOS Group, executed an agreement with KT - Kinetics Technology S.p.A. (KT) for the engineering, procurement of equipment and materials, construction and hand-over of three key units of the project. The value of the contract with KT is PLN 1.26bn.

Pursuant to the contract, KT - Kinetics Technology will construct the deliverables and hand them over for commissioning within 32 months.

“Choosing a reputable contractor for the EFRA Programme is another important step bringing us closer to the launch of what is a key technological complex for our Group. Thanks to EFRA, we will join the world’s elite in advanced crude oil processing technologies, with a positive effect on our margins,” said Pawe? Olechnowicz, President of the Grupa LOTOS Management Board. “EFRA also proves our consistent pursuit of the LOTOS Group’s growth strategy to combine the world’s most comprehensive oil processing techniques with upstream expansion. We have also delivered on our commitment to the shareholders who acquired our shares last year. We should look at the EFRA Programme in the broader context of Polish economy. Valued at over PLN 2bn, it is an exemplar of a major investment in advanced industrial technologies. Such investment projects are the foundation of any economy, giving it strength.”

In the contractor selection process for the delayed coking project, invitations were sent to 13 engineering firms from around the world which had previous experience with projects involving heavy residue processing. Factors under evaluation included the price and payment terms, process guarantees and the scope of contractual obligations, work performance and organisation schedules, availability of financial support for the project, technological solutions, and experience with similar projects. A separate tender procedure was carried out for the construction of a hydrogen generation unit. Ultimately, the company decided to execute a single agreement for the construction of all three units with KT, which was deemed the optimal solution. The fact that a single, reputable contractor will be responsible for the majority of works in the project has strengthened the position of Grupa LOTOS in negotiations with financial institutions interested in providing credit facilities for the investment.

“We have chosen a well-tried contractor. KT - Kinetics Technology is a large international engineering company with an extensive track record in the refining and petrochemical industries. Its business consists in the procurement of technologies and construction of refining, gas and petrochemical units,” stressed Piotr Przyborowski, President of the LOTOS Asfalt Management Board. “What is also very important to us is that KT has proved itself to be a reliable partner during earlier projects at Grupa LOTOS S.A. We are therefore confident that the contractor will deliver the project with full professionalism.”

The contractor will construct key elements of the EFRA Programme at the LOTOS refinery in Gda?sk. The delayed coking unit, which is at the heart of the project, will enable comprehensive processing of all heavy oil residues from the refinery. They will be used to manufacture products on which the company achieves the highest margins. The unit will be fed with heavy residues from the refining process, currently used to produce fuel oils and bitumens.

With the EFRA Programme’s units, the refinery in Gda?sk will add up to 900,000 tonnes to its annual fuel output and will also produce 350,000 tonnes of coke. The Programme is expected to increase the refining margin by some USD 2 per each barrel of oil processed.

LOTOS Asfalt is a leading manufacturer of bitumen in Europe and is the Polish market’s leader in sales of the most advanced MODBIT modified bitumens. Since its establishment in 2004, the company has specialised in the manufacture and sale of bitumens and bitumen road emulsions. Thanks to its long experience, cutting-edge technologies, high product quality, and efficient customer service, LOTOS Asfalt enjoys a high position on the market and can successfully fulfil its mission, which is to pursue innovation-oriented development in the areas of production, trade and distribution of high-quality bitumen products, with due regard paid to the natural environment, to ensure full satisfaction of customers as well as ongoing enhancement and fulfilment of the employees’ potential.

KT - Kinetics Technology (KT) is a company of the Maire Tecnimont group, an international leader in industrial construction and procurement of technologies and licences. The group, listed on the Milan Stock Exchange, carries out its business in more than 30 countries. KT is an international engineering company with an extensive track record in the refining and petrochemical industries. Its business consists in the procurement of technologies and construction of refining, gas and petrochemical units.