LUKOil May Build Refinery on American East Coast

Russia's largest privately-owned oil producer LUKoil is considering building a refinery in the United States jointly with its shareholder and strategic partner ConocoPhillips, a business paper reported on Tuesday.

The refinery would enable LUKoil to supply fuel to its 1,500 filling stations along the United States' East Coast, Kommersant said.

LUKoil plans to locate the refinery on the U.S. East Coast, the paper said, citing documentation prepared by the Kremlin for the visit of U.S. President Barack Obama to Russia, which began on Monday.

According to the documents, LUKoil will raise investment for ConocoPhillips, which holds a 20% stake in the oil producer, to build the refinery that is expected to process Russian crude oil blends.

LUKoil confirmed to Kommersant that the company was considering this possibility. "ConocoPhillips is our strategic partner; however, it is impossible to say at this time when the project will be implemented and whether it will occur at all."

According to Kommersant, LUKoil first put forward the U.S. refinery proposal back in 2001, a year after it purchased a Getty Petroleum network of about 1,300 filling stations in the U.S.

In 2004, LUKoil purchased 795 filling stations from ConocoPhillips, which increased the Russian oil producer's East Coast chain to over 1,500 gas stations. Based on its average sales from its filling stations, LUKoil annually sells about 4 million metric tons (29 million barrels) of petroleum products on the U.S. market, the paper said.

According to Kommersant, LUKoil has repeatedly said that it has no plans to quit the U.S. market.

In addition to the U.S., LUKoil is also considering building refineries in Venezuela and Cuba, Kommersant said.

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