Black Sea Petroleum (BSP), Georgia’s first full-scale oil refinery, has set a strategic goal to fully replace Russian crude with alternative sources, CEO and co-founder David Potskhveria told TV-program Business Weekly in an exclusive interview. While BSP initially began operations using Russian crude, the company is now actively working to diversify its supply, which will ultimately allow it to export products to the European Union.
“Our task is to completely replace existing Russian crude. We are working first with Turkmen oil, and in the next stage, we plan to use Kazakh and other alternative sources,” Potskhveria said. Diversifying crude sources is crucial, as the EU currently bans imports of petroleum products refined from Russian oil. Using alternative crude will remove these export restrictions and open new markets for BSP.
However, one major challenge has been the start of Turkmen oil transit via Azerbaijan’s railway system. Despite agreements being reached months ago, practical transportation of Turkmen crude has been delayed. “Unfortunately, and somewhat unexpectedly, rail transit through Azerbaijan for our direction has become difficult. We reached an agreement for Turkmen crude several months ago, but its transport has been postponed,” Potskhveria explained. He added that once the rail supply chain is activated, it will automatically allow the transit of other sources, including Kazakh crude.
The Kulevi refinery project involves a $600 million investment, with the first phase exceeding $150 million. The initial stage established a 1.2-million-ton annual-capacity facility producing semi-finished feedstock for naphtha, fuel oil, and diesel. Upon completion of Phase II, the refinery will be able to produce Euro-5 gasoline, aviation fuel, and Euro-diesel, raising total annual output to 4.5 million tons.
