Grupa Lotos Refinery Upgrade, Gdañsk, Poland

Grupa Lotos SA is a Polish oil company based in Gdańsk. The company's business is the refining of crude oil and its conversion into high-value hydrocarbon products.

These products including unleaded gasoline, diesel, fuel oils, aviation fuels, motor and industrial lubricants, bitumens, and gases are sold through its own chain of 500 outlets (the company acquired the former Esso and Slovnaft petrol station networks in Poland to increase its retail influence) throughout Poland and the Czech Republic.

Grupa Lotos is the market leader in lubricant oil in Poland and is expected to gain a 10% market share in the Polish fuels market by 2012. The company in Poland operates the Gdańsk refinery, which is the second largest in the country and refines in excess of six million tons of crude oil a year.

The refinery has three units – a fuel block processing six million tons of petroleum a year, an oil block that manufactures 250,000t of lubricant oil a year and a hydrocracking complex to process heavy oil fractions. The refinery obtains supplies of crude oil from a terminal in the northern port of Gdańsk and also the Przyjazn pipeline.

REFINERY DEVELOPMENT

The Grupa Lotos strategy since the early 2000s has been one of investment. The Gdańsk refinery investment programme is part of the Comprehensive Technical Upgrade Programme (CTUP). This involved three contracts being awarded in 2007.

In December 2007 Technip was awarded a turnkey contract (engineering, procurement, construction), which is worth €472m for an upgrade of the Gdańsk refinery.

The new investment will involve the construction of a new 45,000bpd mild hydrocracking unit which will be based upon technology licensed from Shell. This upgrade will increase the throughput capacity of the refinery by 75% to give a total processing capacity of 10.5 million tons a year with an improved conversion ratio. The project is scheduled to be completed by November 2010.

In August 2007 Fluor Corporation was awarded a €200m ($275.3m) contract to provide engineering, procurement and construction management services to build utilities and off-sites at the Gdańsk refinery.

The project will include the construction of a new tank farm, new interconnections, LPG washing unit, revamping of a high-voltage power distribution system, revamping of water systems and other outside battery limits units.

David Seaton, Fluor Energy and Chemicals Group president, commented: "This project enables Grupa Lotos to comply with the EU requirements concerning the quality of diesel oils, which will be in force as of 2009." Fluor will start construction work on the project in February 2008 and the project is scheduled to be completed by February 2010.

In October 2007 Lurgi SA (Krakow) was awarded a contract worth €102m for the construction of a 4.5 million tonnes a year crude oil distillation unit at the Gdańsk refinery. Lurgi will also supply a hydrogen unit (capacity of seven metric tonnes an hour) in a contract worth €80m and a vacuum distillation unit. These units are expected to be on-stream by the second half of 2009 and are expected to help the refinery's new throughput goal of 10.5 million tons a year.

The hydrogen plant will have the capability to process a number of different feed stocks including natural gas, naphtha and LPG (Liquid Petroleum Gas).

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