Additional Modernization of Pančevo Oil Refinery

August 22, 2013

This summer NIS has completed the investment activities in Pančevo Oil Refinery worth of almost six billion RSD. Thereby the process of permanent improvement of refining capacities has been continued after last year’s successful start-up of the MHC&DHT complex for producing Euro 5 petroleum products. During this period, the Company has completed the modernization of the terminal at the river Danube and continued to modernize loading terminals. In addition, the biggest refining complex for the production of gasoline and gasoline components (FCC Complex) has been reconstructed as well. Numerous investments have been completed to reduce the production costs and achieve the level of energy efficiency, including thermal insulation in 24 tanks which implies the application of a special liquid ceramic insulation material. In the next two months all the requirements for the production of biodiesel with the appropriate bio-components contents will be met. Owing to this investment worth of more than 100 million RSD, NIS will have the opportunity to export petroleum products to the countries of the European Union. Apart from these investments, around 40 small-scale technical-technological projects and improvements in the Refinery will have been completed by the end of the year. The Danube port – The completion of a modern terminal at the river Danube allowing for loading and unloading of petroleum products in line with the strictest global standards is definitely the biggest investment to have been completed during summer period and worth of almost four billion RSD. It is an environment-related investment and new loading arms and the system for return and gas phase liquefaction (VRU units) will practically completely eliminate emissions of harmful substances in the air, soil and water. The modernization of the Danube port will provide precise and centralized loading/unloading management and control, occupational safety for employees, as well as compliance with strict safety and fire protection standards. Within the terminal modernization activities, five modern double-shield tanks with a fixed roof, floating membrane and blanketing system which prevents emissions into atmosphere have been constructed. Completely new pipeline and closed drainage system has been constructed, and oil and atmospheric sewerage system has been reconstructed. and old fire alarm system will be replaced. Therefore, the construction of a modern port for loading and unloading of petroleum products not only will solve environmental problems regarding air pollution, but also all the problems regarding land and water pollution. Refinery Loading Terminal – The next project includes the modernization of the loading terminal in the Refinery which will be completed in four phases. The second phase worth of almost 700 million RSD has been completed during which the system for bottom loading has been installed in accordance with modern European standards which will result in zero emission of pollutants into the atmosphere. Apart from air protection, the construction of closed drainage, sewerage and unloading system ensured the protection of soil and groundwater from potential spills of harmful matters. The work process has been further developed and modernized by installing a new control system and instrumental equipment, while industrial safety of the installation has been improved by using the automated blocking systems, fire and gas detection system as well as new modern automatic fire extinguishing system. New MES software has been installed by which more efficient dispatching of petroleum products and more comfortable and safer work for employees have been ensured. In early August and immediately upon completion of this investment, the third phase of modernization of the loading terminal has been initiated. It will include closed and ecologically modern loading of mazut as well as ensuring car tank bottom loading in several loading islands. Based on preliminary estimates, these works will be worth of 230 million RSD. FCC Complex – The process of further modernization of the plant for producing gasoline and gasoline components in the FCC complex worth of 290 million RSD has been completed. Modern separators and cyclones have been installed in the reactor by which the primary objective has been achieved: to increase operational safety and the production of products subject to a greater market demand. These products include a liquid petroleum gas and propylene whose production after the reconstruction will be increased by 29 percent, while the production of diesel will be increased by 9.7 percent. Reservoir thermal insulation - In view of achieving greater energy efficiency and lower consumption of steam for tank heating, the investment activity to include the application of thermal insulation to 24 tanks in the form of a special liquid ceramic insulation material - "Isolate", manufactured in Russia is currently in place in Pančevo Oil Refinery. The total value of this investment is about 250 million RSD, and it is estimated that this investment will pay off in three years owing to steam savings made during the process of tank heating.