Comprehensive modernization of the oil refinery

Sector
Energy Sector
Stream
Creation of new, expansion, reconstruction, technical re-equipment of existing energy infrastructure facilities (high-voltage power transmission lines, substations, high-voltage equipment, etc.)
Project Status
Preliminary Investment Feasibility Study
Entry into Portfolio
State level of SP
Investment Feasibility Study
Implementation
Completion

General information

Description of the project

The project involves a comprehensive modernization of the oil refinery with the replacement of a significant part of the oil refining equipment, increasing the depth of processing and increasing the design processing capacity from 6 to 11 million tons of oil per year. After the start of the full-scale invasion of Russian troops into Ukraine in February 2022, the main routes of oil and oil products in Europe and Ukraine were changed, which emphasized the need for self-sufficiency in energy, including the creation of the necessary levels of minimum reserves of oil and oil products.

The purpose of the project

Main Goal:

Capacity building

Secondary Goal:

Increasing compliance with modern standards, Creation of new facilities and services, Rebuilding the damaged/destroyed, Improving the condition of infrastructure, Improving the quality of services

Description of the purpose of the project and ways to achieve it

The goal of the project is a comprehensive modernization of the oil refinery to increase the volume and depth of processing, and, as a result, overcome the critical dependence of the Ukrainian economy on imports of petroleum products.

Problems and solutions resulting from project implementation

The existing equipment is partially destroyed as a result of missile attacks on the infrastructure by the Russian Federation, is not efficient enough in terms of the depth of processing (currently, the depth of oil processing in terms of petroleum products is about 74%), emits significant amounts of greenhouse gases and limits the possibilities of increasing the volume of oil processing to cover most of the needs of the domestic Ukrainian market in petroleum products. The key objectives of the project are: • Decarbonization (reduction of CO2, NOx, CH4, SO2, etc. emissions by 1 ton after modernization); • Increase in the volume of raw material processing from 6 to 11 million tons; • Increase in the depth of processing from 74% to 95%; • Ensuring coverage of more than 2/3 of Ukraine's needs in petroleum products.

Socio-economic context

Indicator

Value

Other functional

11000000 t

Other functional

95 %

Strategic Case

Strategic feasibility of the project

Sector

Energy Sector

Subsector

Electric power industry

Stream

Creation of new, expansion, reconstruction, technical re-equipment of existing energy infrastructure facilities (high-voltage power transmission lines, substations, high-voltage equipment, etc.)

Strategic document

Energy Strategy of Ukraine until 2050

Task

Ensuring a stable, balanced model of operation of the Unified Power System of Ukraine; restoration, development and transformation of the power system, its sustainable operation;; increasing the efficiency of substations

Project objectives

Indicator
Base value
Target value
Increasing the depth of processing from 74% to 95%
74 %
95 %
Increase in raw material processing volumes from 6 to 11 million tons
3000000 t
11000000 t

Project Sustainable Development Goals

Demand for the service and its dynamics

What methodology was used to estimate demand?

Оцінка потреб економіки України у нафтопродуктах
[Response was provided in the Preliminary Investment Feasibility Study]

Has data from external sources been used in the demand assessment?

No
[Response was provided in the Preliminary Investment Feasibility Study]

Does the demand forecast take into account the latest demographic and economic forecasts?

No
[Response was provided in the Preliminary Investment Feasibility Study]
Indicator
Year
Demand
Annual demand for services/infrastructure
1
11000000 t
Economic justification

Analysis of the project's impact on ecology and climate change

Does the planned activity have a potential positive contribution to achieving climate or environmental objectives?

Transition to a circular economy
[Response was provided in the Preliminary Investment Feasibility Study]
Climate change mitigation
[Response was provided in the Preliminary Investment Feasibility Study]

Is the proposed project expected to significantly harm any of the following climate or environmental objectives?

None of the options are applicable

Project sustainability and inclusivity

Identify potential gender risks of the project and indicate possible ways to overcome them:

None of the options are applicable

Does the project provide for improving women's access to services?

Envisaged training or advanced training for women in the private sector
[Response was provided in the Preliminary Investment Feasibility Study]
The project will create jobs available to women (temporarily or permanently)
[Response was provided in the Preliminary Investment Feasibility Study]

Are civil society organizations representing women and vulnerable groups included in the consultation process?

No
[Response was provided in the Preliminary Investment Feasibility Study]

Alternative technical solutions

Technical Solution 1

Comprehensive modernization of the oil refinery

Technical Solution 2

Construction of a new oil refinery

Cost breakdownCost justificationCost justification
Project cost (preparation and implementation)123'905'000'001 UAH2 UAH
For preparation1 UAH1 UAH
For implementation123'905'000'000 UAH1 UAH
Project operation and closure cost2 UAH2 UAH
For operation1 UAH1 UAH
For closing1 UAH1 UAH
Average annual costs1 UAH1 UAH
Project duration, incl.48 months48 months
Deadline for developing a FFS12 months12 months
Implementation period36 months36 months
Service life360 months360 months
Target indicatorsDefined Not defined
Technical Solution Status
Active

[The technical approach was selected for further detailed analysis or implementation.]

Pending

[The project initiator has not taken any decision about this alternative technical approach.]

Commercial Justification

Supplier and contractor market assessment

Is the project likely to attract a sufficient number of bidders to ensure real competition that will encourage bidders to think innovatively and maximize the quality of their proposals?
Yes

[Response was provided in the Preliminary Investment Feasibility Study]

Is the project of interest to small and medium-sized enterprises?
Yes

[Response was provided in the Preliminary Investment Feasibility Study]

Will the project involve national or international suppliers and contractors?
Yes, both national and international

[Response was provided in the Preliminary Investment Feasibility Study]

Has an analysis of available procurement options been conducted for the technical solution?
No

[Response was provided in the Preliminary Investment Feasibility Study]

Financial justification

Total project budget

Total preliminary budget123'905'000'003 UAH4 UAH
Project cost (preparation and implementation)123'905'000'001 UAH2 UAH
For preparation1 UAH1 UAH
For implementation123'905'000'000 UAH1 UAH
Project operation and closure cost2 UAH2 UAH
For operation1 UAH1 UAH
For closing1 UAH1 UAH
Were the methodological recommendations approved by the Ministry of Finance of Ukraine applied when calculating the indicative budget?
Yes
[Response was provided in the Preliminary Investment Feasibility Study]

Average project cost per service recipient

Service UnitN/A
Service Unit Cost1 UAH

Profitability of the project

Is the project expected to generate income?YesNo
Is the project self-sustaining?Yes
Has the financial condition of the potential beneficiary been assessed in accordance with the order of the Ministry of Finance of Ukraine dated 14.07.2016 No. 616?No
NPV Value13'670'000'000 UAH

Availability of services

Has an analysis been conducted of the accessibility of services for consumers and their financial ability to pay the established tariffs?
No – analysis not performed

[Response was provided in the Preliminary Investment Feasibility Study]

Project Financing Mechanisms

Are funding sources and mechanisms identified?

Source and MechanismYesNo

Public-private partnership

Has a qualitative and quantitative assessment of the project's suitability for implementation through a PPP mechanism been conducted?
No, no assessment was conducted.

[Response was provided in the Preliminary Investment Feasibility Study]

Are there, after conducting an appropriate study, private investors interested in the possibility of implementing the project in the PPP format?
No

[Response was provided in the Preliminary Investment Feasibility Study]

Management Rationale

Team competencies

Determine which competencies/expertise required for successful project preparation and implementation can be provided by the project initiator's own project team (without involving external advisors)
Strategic justification - analysis of the strategic feasibility of the project

[Response was provided in the Preliminary Investment Feasibility Study]

Economic justification - economic analysis

[Response was provided in the Preliminary Investment Feasibility Study]

Project management - communication with stakeholders

[Response was provided in the Preliminary Investment Feasibility Study]

Project management - risk management

[Response was provided in the Preliminary Investment Feasibility Study]

Economic justification - social and gender analysis

[Response was provided in the Preliminary Investment Feasibility Study]

Project management - public consultations

[Response was provided in the Preliminary Investment Feasibility Study]

Project management - legal support

[Response was provided in the Preliminary Investment Feasibility Study]

Strategic rationale - SDG compliance analysis

[Response was provided in the Preliminary Investment Feasibility Study]

Project management - working with international financial organizations (IFOs)

[Response was provided in the Preliminary Investment Feasibility Study]

Financial analysis - financial analysis

[Response was provided in the Preliminary Investment Feasibility Study]

Strategic rationale - demand analysis

[Response was provided in the Preliminary Investment Feasibility Study]

Business case - analysis of the market environment

[Response was provided in the Preliminary Investment Feasibility Study]

Does the team have experience implementing similar projects?
No, this is the first project of its kind.

[Response was provided in the Preliminary Investment Feasibility Study]

Identify which competencies/expertise required for successful project preparation and implementation need to be strengthened by engaging independent experts or consultants
Economic feasibility study - technical expertise

[Response was provided in the Preliminary Investment Feasibility Study]

Economic justification - environmental expertise

[Response was provided in the Preliminary Investment Feasibility Study]

Business case - analysis of available procurement options

[Response was provided in the Preliminary Investment Feasibility Study]

Is there an understanding of where to find relevant experts and consultants?
Partially, we are considering options

[Response was provided in the Preliminary Investment Feasibility Study]

Risk assessment

Financial riskDefinedUndefined
Environmental riskDefinedUndefined
Results of the feasibility analysis
Project Preparation Program Engagement and Funding Needs

Is there ongoing cooperation or support within the framework of international technical assistance (ITA) or from other donor or government agencies?

Yes
[Response was provided in the Preliminary Investment Feasibility Study]

Does the project require preparation assistance from Project Preparation Programs (PPF)?

None of the options are applicable
Need for financing

Does the project require additional funding for preparation?

No
[Response was provided in the Preliminary Investment Feasibility Study]

Project Approval History

DateDecision NumberPortfolioProject StatusDecisionReasonsMaturity level
06/10/2025SP-N-061025-FEF70379State SPPreliminary Investment Feasibility StudyInclude--
28/10/2025SPP-N-281025-8C5D51C6State SPPPreliminary Investment Feasibility StudyNot approved--