Armoil petrochemical plant promises to launch production by July 2021

ArmInfo.In a month, the petrochemical plant in the Nati district of the city of Yeghvard, Kotayk region, will start producing machine oil and bitumen. "The  construction of the plant was completed two years ago, but due to a  number of artificially created problems, we could not start  production in any way," General Director of "Armoil" CJSC Alfred  Abedi said in an interview with ArmInfo.

Alfred Abedi told ArmInfo back in 2018 that Armoil would be ready to  launch a new enterprise, naming specific dates - June-July 2018. But  on July 16, 2018, the Environmental and Inspection Body for Subsoil  decided to stop the construction of the plant. According to official  information, before the start of the refinery construction, "Armoil"  did not conduct an environmental impact assessment (EIA) in  accordance with the RA law "On Expertise and Environmental Impact  Assessment" in relation to the planned construction.

However, already at the end of August, the Armenian government made a  decision to grant tax and customs privileges to "Armoil" CJSC. As the  then Minister of Economic Development and Investments Artsvik  Minasyan stated, there are no obstacles in the way of making a  decision. The inspection body made a decision that reversed its  previous decision, based on the absence of counterarguments to the  arguments presented by the company. In this context, as the minister  pointed out, the company is free to carry out its activities. He also  explained that the previous decision was due to the fact that the  inspection body banned the construction of an oil refinery, and not a  processing plant. But, since as a result of the discussions it became  clear that it was not about the processing of oil, but about the  processing of an existing oil product, the issue was automatically  resolved. Meanwhile, the plant does not function to this day.

As the general director of "Armoil" CJSC explained to ArmInfo, in  2015 the company received permission to build a plant with an area of  1400 sq. m, on an area of about 5 thousand sq. m. and, according to  the the law, the company was not obliged to carry out an EIA, since  this obligation is fixed in the event that the territory of the  enterprise exceeds 1500 sq. m. Then the territory of the enterprise  expanded - the company bought a land plot of 25 thousand square  meters and at the end of 2017 received government permission to  transfer the acquired land plots from agricultural land to industrial  land with a total area of 30 thousand square meters. After the  completion of construction work, and receiving a response to the  corresponding request from the expert center "Environmental Impact  Assessment", which stated that in the case of a completed  construction, an EIA was not required, the company "Armoil", in the  manner prescribed by law, legalized the construction on the basis of  the fact that the legislator allows legalizing an unauthorized  building erected without a building permit.

Alfred Abedi also spoke about the concerns of the environmental  community about a possible threat to environmental safety and health  of citizens due to the fact that the plant is located at a fairly  close distance from the city.  "Oil refining in Armenia, a priori, is  impossible, since oil refineries are being built exclusively next to  oil wells," he explained.

Thus, according to Abedi, at the first stage, having made investments  in the amount of about $ 20 million, instead of the previously  envisaged $ 15 million (out of the total investment package of $ 35  million), and incurring huge losses both financially and  reputationally (counterparties from the UAE, Georgia and Italy have  repeatedly expressed dissatisfaction with the lack of supplies), and  despite the absence of legislative obstacles, "Armoil" was unable to  start production. "We have no problems and gaps with documentation.   Taking into account the mood of the Minister of Economy (Vahan  Kerobyan - ed.note), we hope to launch the enterprise in a month,"  the general director said. 

Already at the initial stage, the production capacity of the  enterprise will amount to 15 thousand tons of machine oil and 5  thousand tons of bitumen per year.  The plant has a specialized  laboratory equipped with modern facilities for testing and  researching manufactured products to ensure their compliance with  international standards. The installation and connection of the  necessary installations, as the general director said, will be  carried out by foreign specialists, who, according to the agreement,  will also conduct 1-2 month courses for the employees of the  enterprise. Due to the small volume of the local market, 80% of the  manufactured products will be exported. 

To note, the company "Armoil" is currently engaged in the import and  sale of petroleum products, petroleum raw materials, engine oils,  diesel fuel, bitumen, etc. The company was founded in 2013 by  founders with more than twenty years of experience in this field in  the oil market in the UAE, the Islamic Republic of Iran, some  countries in Asia, Europe and Africa. The company is the official  representative of the Lubrex brand in Armenia and the CIS countries  and imports machine oils from the UAE.