Over the last decade Ukraine has become more dependent on fuel imports: some 70% of its oil products are still bought from neighboring countries unfriendly to us. This state of the industry is not surprising – five out of six existing refineries in the country are out of order and the sixth is in a state of emergency
Much has been said about theoretical ways to untangle the “fuel loop». Everyone agrees that the only true course is to increase the volume of domestic oil refining
A new refinery enterprise Ukrainian Petroleum will become a practical step in the development of the branch and the country’s economy on the whole, Konstantin Valeulin, president of AES Group investment industrial group is certain of it.
Konstantin, why did AES Group enter the rather complicated market of the country?
We invest into promising industries with high development potential. In the case of the first private refinery in the country it was clear from the very beginning that Ukrainian Petroleum will become an important and reliable link in the energy production chain of Ukraine.
Especially taking into account the course chosen by the country to strengthen its own energy independence.
In addition, we, in general, are attracted by complex tasks, they are more interesting to solve. Many industries in Ukraine have a high potential, but require significant contribution of material and human resources in the first stages.
If you look at the businesses in which we invest, you can say: “Yes, we set ourselves ambitious goals. And when we achieve them, everyone wins – Ukrainian business, the state and society.
What exactly is the potential of a private refinery?
First of all, Ukrainian Petroleum products will partially replace imports and increase exports, which is very important for the industry. In particular, we are planning to produce benzene 99.9%, n-hexane for food, petrochemicals, and m-100 fuel oil
Secondly, we will work with Ukrainian producers. I believe that strong business equals strong country.
The potential of national extractive sector is enormous and will surely gain momentum in the future. Accordingly, there is no reason to develop the economy of neighboring countries, if it makes more sense to develop our own.
In the first half of 2021 alone, Ukraine imported a record amount of gasoline – about 700 thousand tons. We are dependent on imported producers and obviously do not develop our own industry. Work with Ukrainian companies will cover the need in raw materials for domestic production, reduce the cost of the final product and stop the outflow of money from the country.
All this means taxes and jobs. According to our calculations, Ukrainian Petroleum’s annual payments to the state treasury will amount to about 2 billion hryvnias.
How competitive Ukrainian fuel will be, and will Ukrainians be satisfied with the quality of domestic gasoline or diesel?
Precisely because today there are difficulties both with the availability of domestic fuel on the Ukrainian market and with the standard quality of fuel in general, which entails low consumer confidence, we have set ourselves the ambitious task to change the situation.
We rely on the fact that we have everything we need to allow Ukrainian fuel to be competitive on the domestic market. Accordingly, the high quality will be backed by low price.
If we are talking about the quality of the fuel produced by Ukrainian Petroleum, how will it be confirmed? Does the enterprise have the appropriate equipment?
We have concluded contracts for the supply of equipment with the world’s licensed companies.
As for the quality, our task is to produce deep processing of oil and gas condensate. For that purpose, we are implementing catalytic reforming, which is a method of refining oil products, resulting in high-octane gasoline, aromatic hydrocarbons, and industrial hydrogen.
In addition, we will use hydrotreatment, both gasoline and diesel fractions. It is a technology, which under the influence of hydrogen at high pressure and temperature reduces the content of sulfur and nitrogenous compounds in petroleum products.
Have you obviously invested a lot into Ukrainian Petroleum? Have you involved any outside investors for this purpose?
We have not brought in additional investors. Ukrainian Petroleum secured the support of the largest bank of the country “FUIB” by opening a credit line. The whole modernization project will make about $200 million.
When is the enterprise planned to be launched?
Currently we are in the process of re-registration and are conducting a full audit of the business: legal, economic and technical.
Modernization of the plant is in the finishing line: assembly and technological departments are actively working. We are waiting for the delivery of equipment and plan to start production in the first quarter of 2022.
What other industries are now part of the AES Group apart from oil refining?
This is the alcohol industry, in particular, the concern UkrSpecSpirt, which is investing about $10 million in the modernization of two plants. As a result of which we plan to replenish the state treasury in 2022 with 3 billion hryvnias of taxes.
Own research activities, namely the center “Ukrneftehim” – high-tech laboratory, which conducts physical and chemical analysis of petroleum products and all fuels: liquefied petroleum gas, motor and process gasoline, alternative and diesel fuel, fuel oil. Our services of qualitative and quantitative analysis are used by both internal and external customers.
We also develop alternative renewable energy – solar power plants. And we help the national sport, renewing the traditions of Kharkiv soccer.
What steps, in your opinion, should be taken in our country to strengthen the industrial sector?
In my opinion, it is necessary to use new, more advanced technologies in the industry. The launch of the domestic market and the creation of reliable production chains of enterprises will increase Ukraine’s GDP. From the point of view of trade policy, increased processing of raw materials will create jobs and ensure stable tax payments to the country’s treasury. Among other things, supporting exports and creating free competition in the domestic market will be a significant priority.
The current program of the Office of the President, aimed at supporting and developing domestic business, provides an opportunity to invest in the modernization of production, create new competitive domestic products. The unification of visions of the society, authorities and business allows to develop and develop Ukraine.
That is why we closely cooperate with community groups, local communities and authorities, supporting state policy aimed at economic and social development, including competent redistribution of employment as a result of our business decisions.
