TAIF-NK PSC TAIF-NK: From strategic» development to effective result * esARTICLES | aise os ‘y PSC TAIF-NK: From strategic development to effective result of the republic. PSC TAIF-NK is one ofthe leaders inthe industry. Is a promising madern Pisin industyy of Tatarstan isthe most innovative and active sector ofthe economy enterprise active in the refining sectr, which implements innovative projects and develops new high-tech preductian, Stages of growth The national energy strategy included the raw vector of Russia development ‘overthe years. For more than half a cen- tury Tatarstan was the leader in terms Of oil production, however it was only a supplier of raw materials. The absence Of the oil refining industry was a major drawback and affected the economy of the whole region and the development of the country. In order to address these challenges in 1997 in. Nizhnekamsk incustrial area TAIF PSC established its branch PSC TAIF-NK with the basic primary atmospheric. distillation unit yielded a small range of the products: Originally, the main strategic goal of ‘TAIF-NK was to develop and increase oil refining production. Continuous innova: tion was aimed at broadening the range of products, increasing the proportion of light products, increasing processing of raw materials, and improving eco: nomic performance. The enterprise was searching for promising technological solutions using both advanced foreign and domestic technology. The pace of development of the company was unu: sually high. In 2003 TAIF-NK began the constiuction of two large-scale produc: tion units ~ Gasoline Plant and Gas Con- densate Processing Plant, which were straightrun gasoline for ethylene pro: put into operation in December 2005. duction, high-sulphur oil and fuel oil Just two months later the fist atch of FULLNAME: PSCTAAK GENERAL DIRECTOR: Anak sainlin OPERATIONS: DERGsindisty ESTABLISHED: 197 EMPLOYEES: over 30D0peonle TURNOVER: above 10h RUEgasoline that meets all project require ments was produced. In 2006, after the launch of a new unit for processing of gas condensate the capacity in terms of avr material processing has increased by 1 million tons per year. In 2007, the company has signficanily increased its range of products as started manufac turing rew materials for the petrochemi- calindustry, jet fuel, technical kerosene, Giesel fuel, motor gasoline EURO 2 and EURO-4, By 2008, the company was among the first in Russia which switched to pioduction of EURO-4 motor gaso- line. The dynamic development, process improvement, innovative management Contributed to the rapid growth of the company. Today the TAIF-NK is a mod- em oil refinery, fully compliant with the global trends in the industry. It incorpo- rates the largest refinery in the republic, as well asthe factories for production of {gasoline and gas condensate process ing. The entire product range is highly Competitive and includes 25 items: gas- line, jet, diesel and marine fuel, bitu- men road, and liquefied petroleum gas, ‘and so on. The enterprise has developed its own network of petiol stations, which allows the company to provide the pop- tulation with quality fuel directly from ‘the manufacturer. Key performance in- icators reflect the effectiveness of the chosen direction of development: the share of the company for 2012 in the total amount of crude oll processing ‘amounted to 3.1% in the Russian Fed- eration and 53.7% in the Republic of Tatarstan, By the volume of raw material processing TAIF-NK is one of the top ten Russian refineries. For the first half of the year i TAIF-NK: + 4367,8 thou. tons of raw material was processed: + the commercial output amounted to 64,1 bin, RUR; + thesales equaled to 65.5 bin, RUR: + netprofit totaled 47 bln RUR; + exports share inthe sales by volume amounted to 61%; + processing depth by raw materials equaled to 75,68% Quality level - excellent Technological improvement of the refn: ing capacity plays an important role in the strategic development of the com: pany. This goal corresponds with the policy of the Government of the Russian Federation for the upgrade of all opera tional refineries in Russia.PSC TAIF-NK takes methodical effort to the produc tion renewal and innovative technolo: Gles Implementation. Active process of modernization of the company resulted in the transition towards the production of diesel fuel of the European standard EURO-S and termination of production Of diesel fuel of a lower class. The com- pany began producing EURO-S diesel fuel as one of the ist in the country, be- ing ahead of a specified by the Russian government time schedule of switching to high-grade fuel outputHow can we maximize every drop? Veba Combi-Cracking (VEC™) is one of the most robust, commercially proven hydrogen Eerie seen ng ee a rCoR ae rs Reels} refinery residues, heavy crude oil and coal. Meee ine ece merle aoe eae Co Resim (ele NCSC Murer ee ec ucaNy Cc ner cere Meena uta) without the need for addtional-treatment refining.KBR.com ag KBR TECHNOLOGY KNOW-HOW DELIVERED refining.kbr.com Arse ©2790 re ag tn [The shift of the quality of diesel fuel to the highest level was conducted in phast + 2006 - Development of a planto im= prove the quallty of diesel fuel. + 2008 (in cooperation with the Brit= ish company Criterion Catalyst) = completed reconstruction of mig= dle distillates hydrotreatment unit The volume of hydrotreating cata- lyst Increased by 10 %, The cate~ Iytic system was fully replaced. This enabled production of diesel fuel standard EURO ~4 in the amount of 1.65 million tons per year; + 2010 (ncooperation with the Dutch ‘company Shell Global Solutions) - inclusion of an additional reactor, renovation and instalation of new Units. Hydrotreatment unit cepacity increased by 30 % from estimated ‘capacity. + 2012 ~ put the unit commercial op- eration, achievement of its full ca~ pacity (2.0 million tons per year} and the shipment of the fist batches of Euro-5 diesel fuel for export. The sulfur content in EURO-S diesel fuel hhas been minimized, it constitutes less than a thousandth of a percent. Due to the low content of aromatic hydrocar- bonsand sulfur opacity of exhaust gases as well as emission of harmful products of combustion into the atmosphere de- creased, A high cetane number allows the new product to optimize combus- tion of the fuel mixture in the engine. The new diesel fuel produced by TAIF-NK is supplied to the domestic market in 58 regions of Russia; itis also exported to fourteen European countries. The EURO- 5 diesel fuel has already replaced the EURO-4 fuel in the Sever oll pipeline, by Which itis delivered from Nizhnekamsk to the port of Primorsk. In the current year the company plans to export up to 6679 of the total supply of diesel fuel of the highest class and to deliver 33% to the domestic market. The share of TAIF-NK in the production Of diesel fuel in the first half of 2013 in the Republic of Tatarstan amounted to {96.49% and 3% in the Russian Federation After commissioning the production of environmentally friendly diesel fuel with capacity of more than 2.015.000 tons, the company reached a new level in terms of its economic, social, and environmental impact. Improving the quelity of oil products with high envi- ronmental charactetistics remains one Of the key factors to lead the company to the state-of-the-art, The strategie project ‘Today, the main problems in the Russian oil refining industry is the low depth of oil processing and a minimum of sec- ondary processes , which negatively affects the amount of light petroleum products . The transition to an innova- tive model of development is the basis, of competitive capacity of the refining industry. At the heart of al the transfor ‘mations of TAIF-NK is the determination to reach European standards. Use of the latest technology enables the com- pany to effectively improve production processes, to produce @ new genera- tion of products and expand the prod~ uct range. In 2012, TAIF -NK started the construction of a new production site = a heavy residue conveision complex (HRCC], The cost of implementation of this major project amounts to $ 1.56 billion, The project will be an important direction in the development of the company for the next three years, The complex will increase the depth of oil processing from the current 75 % to 95, %. It will also enable the company stop the production of commercial heavy oil products such as fuel oi, gas ol, anc tar. The complex will be based on a mult stage hydrocracking unit using the lat est technology Veba Combi Cracking The uniqueness of this technology lies inthe combination of two processes: the process of liquid-phase hydrogenation of heavy vacuum residues with the pro- cess of its further gas-phase hydrogena tion jointly with fresh vacuum gas oil. In eddition the KBR licensed additive shall be used jn the process of liquid-phase hydrogenation. The unit capacity by raw material amounts to 2.7 bin. tons/year of vacuum residue and 1.0 bin; tons/ year of vacuum gas oll, The complex willWorld Class Process Equipment Manufacturer and Total Solutions Provider a + Total Solutions + Plant 0am + Process Gas Waste Hoat Recovary Systems ‘+ Mombrano Technology Systems: Sour Gas & Sulphur Technology + Compression Systems + Fired & Heat Recovery Boilers + Quench Coolers + Screped Surface Exchangers + Process & Pressure Vessels + Hoat Transfer Equipment + Storage Facilities + Process Skid Packages & Modules + Industrial & Power Plant Services KOC KNM Process Systoms Sdn Bhd Few Hudson tans SpA ‘Sonste BORSIG Boller Systeme Sen Ot WOE PTKPE Industries: WOE KNM Exoilc Equipment San Bndinclude also sulphur recovery unit and unit of special additive required for the technological process. The technology is very economical due to the low cost of black oil and the availability of natu- ral gas (for processes require 600 million m3 per year). The main products of the complex will be high-quality oil prod- ucts that will satisfy the needs of the chemical and petrochemical industry of the Republic of Tatarstan, the Russian Federation, and will be implemented in the export line: diesel fuel and motor dgasolines of EURO-S standerd, aviation kerosene, top-quality naphtha, propane and butane fractions, prill sulphur. As a result the Company's profit willinctease by 1.722 times. Over 700 new jobs will bbe available at the new plant: All prod- ucts manufactured at the new HRCC will demonstrate improved environmental characteristics, in particular, reduced sulfur content (in naphtha and diesel fuol not more than 10 mg/kg), aromatic and highly volatile hydrocarbons. It is the factor of the positive impact on the ecological situation. In the design of the complex the advanced resource-saving technologies shall be assumed to im- plementation as well as the measures that will allow to decrease the negative impact on the environment brought by the Company's designed and existing objects shall be developed. This unioue project is strategically important for the development of the region and for the oil industry of the entire country es, the deepening of ol refining across the country leads to growth ofthe economy asa whole. Main phases of HRCC construction project: + December 2011 = TAIF-NK signed a licensing agreement with the com- any KELLOGG BROWN & ROOT, LTD (KBR), the United States, for Veba Combi Cracking (VCC) technology. + February 2012 TAIF-NK signed the contract with KER Company for the basic design of VCC unit. + October 2012 - TAIF-NK signed a contract for the supply of equip- ment with long production petiod with Toyo Engineering Corporation, Japan, + November 2072 - the start of con- struction of HRC was announced. + 2016 = planned commissioning of all facilities of HRC. Indicators of development Innovative policy and the moderniza- tion of production as the strategically important development factors work for the high result. High quality and en- Vironmental performance of oil prod- ucts were recognized in the following, republican and federal contests “ECO leader, ‘Best Goods of the Republic of Tatarstan’, “100 best goods of Russia’, "100 Best Companies of Russie. Ecol ogy and Environmental Management” The constant and hard work aiming to the improvement of the technological and management processes providing the Company's competitive potentials stands for high quality and all-Russian recognition. The company has imple- mented an. integrated management system and certified it for compliance with four international standards: ISO 9001:2008 “Quality Menagement Sys tems, ISO 14001:2004 “Environmental Management’, CHSAS 18001:2007 “Oc cupational Health and Safety Manage: ment Systems’ and EN/AS 9100:2009 "Quality Management Systems: Re- quirements for any organization of avia tion, space and defense industries! The victory in the Russian national contest where TAIFNK was awarded with the Prize of the Russian Federation in the field of quality is a confirmation of the «effective performance of the manage ment and leadership of the company and of the cepabilities of the enterprise interms of manufacturing of high-quali- ty, competitive products. The concept of “modern enterprise" can not exist ‘out an understanding of the corporate social responsibilty. The company “TAI NK" traditionally pays great attention to philanthropy and social purposes. In fast year social policy expenditures amount: ‘ed to 376.1 min, RUR, 1.3 bln. RUR was aimed for charity and sponsor support, participation in social projects. The motto “Force for good” unites 2 group of companies of TAIF and accurately re- flects its mission, ie. to be helpful direct: Iy in economic state improvervent, the social services in the Republic of Tatar stan and the well-being ofits residents, PSC TAIF-NK is constantly developing ‘The company’s operations on level of objectives, the quolity of results and the operating effectiveness correspond to the principal criteria of the company as a leader. The use of modern innova tive technologies in all ongoing projects guarantee the capability of the com: pany to maintain and enhance the com petitiveness of its oroducts in the Euro: pean, Russian, and national markets.The results achieved are the place of arms for the further significant growth of the compary, which development is based (on the synthesis of professionalism and understanding of the importance of the {goals raised before the entire petroleum refining industry sector of Russia, \Wiitten by Elena RozhkoTA@ —HIZ a PSC.,TAIF-NK” = 423570, Nizhnekamsk-11, P / 0 20, Republic of Tatarstan, Russia www.taifnk.ru