Russian oil giant LUKoil [RTS: LKOH] said it planned to invest $3 billion by 2012 in projects to build a gas refinery and filling stations in Kalmykia, a Russian republic on the Caspian Sea.
LUKoil CEO Vagit Alekperov said: "We plan to establish a gas refining facility in Kalmykia. The signed agreement will boost our relations with the southern region."
The CEO said the new plant, which will produce industrial chemicals from natural gas, would depend on natural gas supplies from LUKoil-owned deposits in the north of the Caspian Sea, where up to 10 million metric tons (75 million bbl) of oil and up to 12 billion cubic meters of gas are to be produced annually.
Alekperov said Kalmykia was chosen out of five potential regions because of its advantageous geographic position for gas supplies, and for shipment of refined products.
The head of the Kalmyk Republic, Kirsan Ilyumzhinov, said: "We are happy that Kalmykia has been chosen as a terminal point for oil and gas. The republic has been an economically weak region, but we will do everything possible to attract investors."
The LUKoil CEO said his company would build 10 filling stations in Kalmykia as part of the cooperation deal, and would negotiate a favorable tax regime with the republic's authorities. |
