LUKOIL’s new business sector, Power Generation, was created in
2008 as part of the Group’s Strategic Development Program.
The new business comprises all aspects of power generation, including
delivery and marketing of electrical energy and of heat produced at power
plants. The nucleus of the segment is the Russian power generating company,
UGK TGK-8, which was acquired by LUKOIL in 2008, but it also includes companies
producing electricity and heat in Bulgaria, Romania, and Ukraine.
The sector provides energy both for the Company’s own needs (in the
Exploration & Production and Refining & Marketing segments) and for
external power and heat customers in the Southern Federal District of
Reorganization of UGK-TGK-8 was completed in the reporting year. The
company was renamed ‘LUKOIL-Ecoenergo’ and was united with the Company’s hydro-electric
facilities. LUKOIL-Ecoenergo will now focus specifically on renewable energy projects
(wind power, hydroelectric and solar power).
Electricity and heat generation
Total electricity output in 2012 by companies in LUKOIL’s electricity
division was 15.4 billion kWh and heat output was 14.7 million Gcal, of which
13.4 million Gcal in Russia. Levels of electricity and heat production were
dictated by conditions on the electricity market.
LUKOIL is rapidly developing its own power generating facilities at oil
& gas fields, enabling the Group to substantially reduce electricity
purchases and increase the rate of associated gas use by turning it into
electricity. Installed capacity of small-scale generating facilities is 0.7 GW.
The Group generated 2,349 million kWh of electricity at its own facilities in 2012.
The Company’s energy management program represents a permanent
mechanism, which helps LUKOIL enterprises to improve their energy efficiency.
The system should be extended to all LUKOIL Group organizations by the end of
2015, by which time it will also be ISO 50001 certified.
During 2012 LUKOIL continued to develop its partnership in the
field of renewable energy with the Italian company ERG, which has long
experience in the construction and operation of renewable energy facilities. The
joint venture, LUKERG Renew GmbH, acquired 100% of the Romanian company Land
Power SRL, which has rights to build a wind generating plant in Romania.
Construction of the plant, consisting of 42 wind generators with total capacity
of 84 megawatts, is due to begin in 2013, and annual output from the plant will
be in excess of 200 thousand mWh.
Also in the reporting year LUKOIL completed the acquisition of
two wind plants in Bulgaria – Kavarna (32 megawatts) and Long Man (8 megawatts)
– from Raiffeisen Energy Environment. The plants operate 20 wind turbines (each
2 megawatts) built by the company Vestas. Total output in 2012 was 101,882 kWh
(121% of the annual target).