Vladimir Gagić, the director of the Processing Block at NIS, in an interview for the weekly Pančevac talks about the modernization and further development of the Oil Refinery in Pančevo.
After the major overhaul, the Refinery once again restored regular production process. What is the volume of refining and are there innovations in refining in our city?
This year’s major overhaul of the Pančevo Oil Refinery is one of the most complex in its history. For the first time, all refinery units were reworked within one single overhaul, and for the first time the inter-overhaul cycle lasted 5 years (the last overhaul was carried out in 2019). It was about increasing the reliability and efficiency of refinery plants. Each overhaul is a significant step towards further modernization and improvement of production capacities, as well as the reliability of the plant operation. When it comes to this year’s overhaul, I can safely say that it is an undertaking worth RSD 9.3 billion, i.e. a project enabling the modernization of all plants, including newly built ones, overhauled for the first time. 12 investment projects worth RSD 4.1 billion and 33 investment maintenance projects worth RSD 1.7 billion have also implemented.
In addition to our goal to increase energy efficiency, improve environmental protection, it is important to emphasize that the overhaul is also our legal obligation through which we strive to ensure the long-term reliability of all aspects of production. The scope of overhaul works is best evidenced by the figures, and the overhaul was carried out on 34 reactors and absorbers, 850 cubic meters of catalysts were replaced, 245 pressure vessels, 47 compressors and pumps, 310 heat exchangers were overhauled.
The result of overhaul activities is further improvement of reliability, energy efficiency, and furthermore, we introduced new standards of environmental sustainability of production. In addition to the quality of works, the focus of all activities was on the safety of all actors, taking into account that besides our employees, about 3600 external contractors were involved in overhaul works and projects. It is also worth pointing out that all activities were carried out in accordance with the strict environmental standards, which enabled the continuation of the production of high-quality petroleum products that meet all national and international standards.
Investments are an integral part of your company’s business policy. Every year, the focus of NIS’s investment is refining. What are NIS ‘plans in the upcoming period when it comes to this segment of business?
NIS continuously invests in the modernization and expansion of its capacities, which is confirmed by the investments made so far in the Pančevo Oil Refinery. Since 2009, we have invested over EUR 900 million in the modernization of the domestic processing complex. It is important to point out that the modernization of the refinery is a complex and long-term process, because it is only with continuous investments that can we survive in an extremely competitive market. Since 2009, we have carried out two phases of modernization.
During the first phase, we enabled the production of fuel according to European quality standards, which ensured the energy stability of the domestic market. Thanks to these investments, NIS also became an exporter of fuel and confirmed the status of largest national supplier. Moreover, the MHC/DHT complex commissioning within the first phase of modernization reduced the emission of harmful gases by more than 10 percent, while all products have less than 10 ppm of sulfur.
The apogee of the second phase of modernization was the commissioning of the “Bottom of the Barrel” complex worth over 300 million euros. This plant’s operation enabled an increase in the depth of processing from 84 percent to 99 percent, which is in the range of the best European refineries. At the same time, the production of high-sulfur fuel oil has practically ceased, which gives significant environmental benefits, while the production of the highest quality fuels, which are also the most valuable on the market, has increased. Additionally, the “Bottom-of-the-Barrel” opened the door to the production of petroleum coke, previously imported to Serbia.
But the modernization of the refinery is practically an endless job, as we must constantly work to be more efficient, more operational, to automate processes and to protect the environment even more. Future investments will focus on strengthening the technological connection between the refinery and Petrohemija, petrochemical company, providing greater flexibility in production, depending on market needs. NIS continuously invests in the development and modernization of its processing capacities and we will remain focused on modernization, increasing the energy efficiency of the refinery as well as the digitization of business processes, with an emphasis on environmental components during the implementation of all new projects in the Refinery.
HIP “Petrohemija” is an acquisition of a regional leader in oil refining, which is in accordance with the strategic interests of NIS development. How and to what extent does synergy with petrochemical production contribute to the total production potential of NIS?
The global oil market is unpredictable and it is a fact that only companies that diversify the range of products survive. Today, we are witnessing an increasing integration of the refinery and petrochemical industry, in parallel with rising petroleum refining for the petrochemical industry. Therefore, the integration of HIP Petrohemija into the business system of NIS is a strategic and logical move, taking into account the technical and technological connection of the two complexes.
Petrohemija also uses straight-run petrol from the Refinery as the basic raw material. On the other hand, pyrolysis gasoline obtained in HIP Petrohemija is used for further processing in the refinery for the purpose of obtaining motor gasoline components and chemical products. There are other benefits of integration, such as strengthening Serbia’s petroleum and petrochemical sector, making it more flexible and competitive. The synergy of the two complexes will undoubtedly contribute to a greater optimization of resources, as well as to the strengthening of the market position, ensuring technological progress and strengthening the market competitiveness of domestic processing complexes. It is also important to emphasize that the expansion of NIS’ business activities in the field of the petrochemical industry is in line with the business diversification strategy; this includes projects from the energy and petrochemical sectors. As part of the Strategic Partnership Agreement, NIS has undertaken a capital increase of Petrohemija in the amount of EUR 150 million for the next six years, which will include the construction of a polypropylene production plant with a capacity of at least 140,000 tons annually. This project is one of the key investments in the future development and competitiveness of NIS on the market.
I would also like to refer to another aspect of strengthening the domestic oil and petrochemical sectors, resulting from the fact that both the Pancevo Oil Refinery and Petrohemija constitute important employers for the local community, which, among other things, continuously invest in the education of new generations, in accordance with our business needs. We have also established strategic cooperation with four secondary schools of importance for our industry. This cooperation aims to improve the training process within certain educational profiles for the needs of the company, but also to engage young professionals who can make their business steps in large systems such as NIS.
NIS is an active participant in the “green agenda” transition. What does the Refinery’s transformation process look like in the context of this international development economic policy?
NIS continuously invests in projects that contribute to reducing negative impact on the environment. What we are particularly proud of is the fact that a significant part of environmental investments at the company level took place in the Pančevo Oil Refinery, one of the most modern and “greenest” in this part of Europe. Since 2009, about EUR 95 million have been invested in the field of environmental protection in the Pančevo refinery. Thanks to environmental investments made in the Pančevo refinery during the previous 15 years, we have reduced emissions of sulfur oxides, nitrogen oxides and particulate matter by as much as 90 percent. As a result, in 2017, the Pančevo Oil Refinery became the first power plant in Serbia to obtain a permit for the integrated prevention and control of environmental pollution. This is the most important document an operator can obtain, which confirms that the NIS processing complex is among the highest quality European producers and an important factor in ensuring controlled environmental conditions. This year, the Pančevo refinery received a new integrated IPPC permit, required after the construction of the “Bottom-of-the-Barrel” plant, which additionally supports that the production process in the Refinery is in line with the highest domestic and European standards in the field of environmental protection and that sustainable development is our strategic commitment, for the benefit of the community in which we live and work. This permit is also an obligation to continue using the best available technologies in favor of improving environmental protection, as well as to modernize our plants.
Ultimately, in order to comply with the requirements prescribed by the Law on Climate Change and the Rulebook on Monitoring and Reporting on Greenhouse Gas Emissions (GHG), in December 2024, a permit for greenhouse gas emissions for the Pančevo Oil Refinery was obtained. In the upcoming year, activities on the establishment of a system of monitoring and reporting on GHG emissions as well as the preparation and verification of GHG emissions reports continue, in accordance with the set legal deadlines.
