Kherson Refinery

Kherson Refinery was an oil-processing facility in Kherson, southern Ukraine, and was historically described as the country's third-largest refinery. Construction began in 1935, with the first gasoline produced in April 1938. During the Second World War, the refinery was dismantled and evacuated to Syzran in the Soviet Union's eastern territory. It was rebuilt in Kherson between 1947 and 1950 and returned to operation, followed by additional construction programs during the 1950s and 1970s. The refinery developed into an integrated processing site. Its equipment included a coking unit commissioned in 1970, catalytic reforming capacity added in 1973, and bitumen units installed during the 1960s. Its product slate included straight-run and cracked gasoline, kerosene, diesel fuel, fuel oil, petroleum coke, bitumen, and other asphaltic materials. A pipeline connection from Kremenchuk to Kherson, completed in January 1972, substantially increased the site's access to crude oil and helped raise throughput. Production reached a reported peak of approximately 8.5 million tonnes of crude oil in 1990. The collapse of the Soviet Union then caused a severe decline in crude supply, utilization, and financial stability. Throughput fell to about 1.56 million tonnes in 1994, while by 1996 average monthly throughput had dropped below the level considered necessary for the refinery's financial security. Much of the fixed equipment had also become obsolete. The Ukrainian State Property Fund attempted to privatize a majority stake in the late 1990s. After delays, control passed to Russia's Alliance Group together with Kazakhstani and Russian investors. Production improved during the early 2000s, but the recovery was short-lived. The refinery was shut down for reconstruction in August 2005, with completion initially expected by 2010. Although modernization work and relaunches were repeatedly announced, commercial production did not resume. A company associated with Alliance-Ukraine was established in the late 2000s in connection with planned modernization. In 2009, SOCAR reportedly expressed interest in acquiring the refinery, but the transaction did not occur. Later proposals involved the Lutsk-based Kontinuum group and Chinese financing from Sinopec, with plans to convert the site into a larger petrochemical complex. These plans also failed to restore operations. During the war in Donbas, the idle facility was used for civil-defense and fire-brigade training. A later reconstruction proposal in 2017 envisaged annual capacity of 4.5 million tonnes, but the refinery remained without production. Its prolonged idleness, obsolete infrastructure, and the high cost of restarting made its operational status effectively defunct.

Construction of Kherson Refinery began in 1935, and the first gasoline was produced in April 1938. A small cracking plant was also placed into operation during the late 1930s. After the German invasion of the Soviet Union, the refinery was dismantled and evacuated to Syzran. It remained there during the war before being rebuilt in Kherson between 1947 and 1950. The postwar refinery expanded through successive construction phases. A second major phase took place in the 1950s, while further development occurred in the 1960s and 1970s. Bitumen units were added in the 1960s, a coking unit entered service in 1970, and catalytic reforming was commissioned in 1973. The refinery produced a broad range of fuels and industrial petroleum materials, including gasoline, kerosene, diesel, fuel oil, coke, and bitumen. In January 1972, a pipeline linking Kremenchuk with Kherson enabled a major increase in crude deliveries. The site reached its historical peak in 1990, when it processed about 8.5 million tonnes of crude. After the Soviet Union dissolved, the refinery suffered from reduced crude availability, weak demand, and aging equipment. Throughput fell to approximately 1.56 million tonnes in 1994, and average monthly processing declined further by 1996. Nearly 70 percent of fixed assets were described as obsolete, making continued operation increasingly difficult. Privatization efforts began in the late 1990s. The State Property Fund offered a controlling share, but the process encountered objections and delays. Control eventually moved to Alliance Group, a Russian company, together with Kazakhstani and Russian investors. The change of ownership was followed by some improvement in production during the early 2000s. The refinery's apparent recovery ended in 2005. After a maintenance schedule early that year, Alliance-Ukraine announced a shutdown for reconstruction in August. The program was expected to be completed by 2010, but the plant never resumed normal production. A modernization company connected to Alliance-Ukraine and the refinery was established in the late 2000s. In May 2009, it was reported to have completed an initial modernization stage, yet the restart was postponed indefinitely. Kontinuum, a Lutsk-based business associated with Ukrainian parliamentarian Ihor Yeremeyev, later became connected with ownership or control of the site. SOCAR considered buying the refinery in 2009 without completing the acquisition. In 2011, Kontinuum discussed financing from Sinopec for a reconstruction that would turn the refinery into a petrochemical complex; the projected program was later given a shorter timetable, but it did not proceed to production. The idle site was used for civil-defense and fire-brigade training after the beginning of the war in Donbas. Further analysis characterized the plant as mothballed, and another reconstruction plan announced in 2017 likewise failed to return it to service. The facility is therefore best treated as defunct rather than an operating refinery.

• 2017

  Final reported reconstruction plan

  [1]Kherson Refineryen.wikipedia.org

  A proposal envisaged rebuilding the site to process 4.5 million tonnes of oil annually, but operations remained suspended.

• 2005

  Production shutdown

  [1]Kherson Refineryen.wikipedia.org

  The refinery was closed for a planned reconstruction and did not subsequently return to production.

• 1997

  Privatization process begins

  [1]Kherson Refineryen.wikipedia.org

  Ukraine's State Property Fund offered a majority stake in the refinery through a tender.

• 1990

  Peak crude throughput

  [1]Kherson Refineryen.wikipedia.org

  The refinery reached a reported peak of approximately 8.5 million tonnes of crude processed.

• 1972

  Kremenchuk pipeline connection

  [1]Kherson Refineryen.wikipedia.org

  A pipeline connection to Kremenchuk increased the refinery's crude-oil supply capacity.

• 1970

  Coking unit commissioned

  [1]Kherson Refineryen.wikipedia.org

  A coking unit expanded the refinery's processing capabilities.

• 1950

  Postwar reopening

  [1]Kherson Refineryen.wikipedia.org

  After wartime evacuation to Syzran, the refinery was rebuilt and returned to operation in Kherson.

• 1938

  First gasoline production

  [1]Kherson Refineryen.wikipedia.org

  The first gasoline was produced in April, marking the start of refinery operations.

• 1935

  Construction begins

  [1]Kherson Refineryen.wikipedia.org

  Construction of the Kherson refinery started.

A regional Ukrainian petroleum-refining facility serving the domestic fuels and industrial-products market; historically positioned as one of Ukraine's largest refineries by crude-processing capacity.

• Refined fuels · 1938

  Gasoline

  Gasoline was among the refinery's principal products, including straight-run and cracked grades produced through its conventional refining and cracking processes.

• Refined fuels

  Kerosene and diesel fuel

  The refinery produced middle-distillate fuels, including kerosene and diesel, for transport and industrial use during its operating period.

• Heavy petroleum products

  Fuel oil

  Fuel oil formed part of the refinery's heavier petroleum-product output and was manufactured alongside lighter fuels and residual streams.

• Refinery by-products · 1970

  Petroleum coke

  A coking unit commissioned in 1970 enabled production of petroleum coke from heavier refinery residues.

• Industrial petroleum products · 1960

  Bitumen and asphaltic materials

  Bitumen units installed during the 1960s supplied bitumen and related asphaltic materials for industrial and infrastructure applications.

• 2017

  Renewed reconstruction proposalStrategy

  Background

  The mothballed facility had not produced petroleum products since 2005.

  Action taken

  A new plan proposed rebuilding the refinery with annual crude-processing capacity of 4.5 million tonnes.

  Aftermath

  No production restart is recorded, leaving the facility defunct.

  Source

• 2011

  Proposal to convert the site into a petrochemical complexStrategy

  Background

  Kontinuum sought a new investment structure for the inactive refinery and discussed cooperation with Sinopec.

  Action taken

  The parties proposed a reconstruction lasting several years and aimed at transforming the site into a petrochemical complex rather than simply restoring the former refinery.

  Aftermath

  The project did not bring the plant back into production.

  Proposed reconstruction funding. 2 billion (2011)

  Source

• 2005

  Shutdown for reconstructionStrategy

  Background

  The refinery required modernization after years of declining throughput and aging equipment.

  Action taken

  Alliance-Ukraine shut the plant in August and announced a reconstruction program expected to run until 2010.

  Aftermath

  The planned restart did not occur, and the refinery remained idle.

  Source

1. 1Kherson Refineryen.wikipedia.org