Lukoil-Odesa Refinery To Halt Operations Until Aug 2008 For Reconstruction

The refinery will stop working as of August 1, 2005 to begin building a catalytic cracking mount and a power unit with a capacity of 40 MWt. The project will cost USD 320 mln. Modernization will not increase the refinery?s throughput, but the percentage of oil products refined by the plant other than fuel oil will rise to 80.3% from the current level of 57%. The refinery will also increase the share of gasoline produced according to western European standards in its output. Due to the refinery’s stoppage, Lukoil plans to increase oil deliveries to Ukraine for processing at other Ukrainian refineries to ensure its gas station chain will be fully stocked with oil products. Concorde Capital: Although Lukoil has stated it will increase oil supplies to Ukraine, the Odesa refinery’s stoppage is likely to upset Ukraine?s oil product market in the short run. This may be a key trigger for future oil product price rises.