Oil of Russia Magazine. October 2011. www.oilru.com
Our health largely depends on the quality of water that we drink. Research published in 2009 showed that over 20% of drinking water samples from water supply network did not meet hygienic requirements in terms of their sanitary and chemical, and microbiological characteristics. How can new technology help improve tap water quality and waste water safety at the same time reducing purification costs. The ultimate product of SITTEC Ltd. – titanium coagulant for natural and waste water purification – is a chemical industry product (inorganic chemicals), but the technology that the company uses in the production cycle includes methods applied in mining and metallurgy.
Mrs. Elena Dmitrieva, the Director-General of CJSC SITTEC, speaks to “Oil of Russia” on the company’s history and projects.
- Mrs. Dmitrieva, how did the idea of creating such an enterprise originate? What was the history of SITTEC, and at which stage did it become part of IFD Kapital Group?
In the early 2000s LUKOIL Oil Company came to the Komi Republic. The company acquired among other oil assets a titanium mining licence with corresponding licence obligations, as well as a production complex for oil and titanium ore enrichment and titanium dioxide pigments production, which was constructed in the USSR in two stages in the 60s and 80s of the 20th century.
Since the titanium component was a non-core asset for LUKOIL, it was transferred to Reserve Invest Investment Group, which is now part of IFD Kapital Group.
Until 2008 the project had focused on titanium dioxide pigments production. At the next stage, taking into consideration social and environmental aspects, the shareholders opted for the production of their own innovative high technology product – titanium coagulant, a chemical for drinking water purification and industrial and municipal waste water treatment.
SITTEC Ltd. was established in 2008 as part of IFD Kapital group to operate the project. It should be mentioned that within the frame of the project our company works in close cooperation with LUKOIL-Komi LLC, and that the cooperation will continue to develop, for the oil holding’s subsidiary provides us with resources – Yarega deposit titanium ore.
- The plans that have been announced suggest the attainment of the projected capacity in 2013. What is the current stage of the project?
- The project is currently at the investment stage, capital investments are being made. This February saw the completion of the construction site filling, and the construction of an approach drive. A tender was held with the participation of local enterprises with wide experience of work on the territory. The tender winner was CJSC ViD, which offered both the best technical terms, and the lowest work cost. In April the project got a general contractor – CJSC Trest YamalStroyGasDobycha, an experienced company specializing in industrial facilities construction in North Russia. All the contractors were selected through a complex procedure of two-stage tenders with bidding. At the moment principal technological buildings of the production complex are being constructed.
Another party involved in the construction process is Engineering Gas System LLC, which exercises independent control over the construction works quality. It should be noted that the company is among the first Russian organizations specializing in independent construction quality control. In the nearest future there will be tenders for the supply of equipment which is mainly non-standardized and hence will be produced specially for our project.
In accordance with the approved plan the construction is supposed to be completed in Q4 2012, and the production is to attain the projected capacity (25 000 tons of coagulant per year) in 2013.
- What is the advantage of titanium coagulant use compared to the existing water purification methods in Russia?
- There are a great number of advantages, and all of them are confirmed by numerous studies, and laboratory and industrial tests comparing the titanium coagulant with other chemicals.
On the whole there may be singled out three groups of advantages that our product offers.
The first one is purification quality and efficiency. The performance of our product surpasses current Russian and international standards by a considerable margin, while costs of water treatment by titanium coagulant are 20-40% lower than by so-called traditional coagulants based on ferrum and aluminum.
Secondly, titanium coagulant is less demanding of external conditions, such as the temperature of water that is being treated. Temperature decrease reduces the efficiency of other chemicals. Besides, titanium coagulant allows to abandon completely or to reduce the amount of other chemicals (e.g. chlorine, caustic soda, and others) used for water purification.
The third group of advantages comprises technological advantages. They are called indirect but in terms of economy they may be of more importance than the direct costs of chemicals. These are energy efficiency, logistics costs reduction, filters life increase, and purification plants capacity expansion as a result of less time required for water purification by titanium coagulant.
We have conducted recently a number of tests in Yekaterinburg, Norilsk, and Usinsk, which demonstrated all these advantages to potential consumers, i.e. water supply companies, on their own facilities.
- Is it possible to use the technology in household conditions as well, or only on an industrial scale?
The product is primarily produced for large-scale consumers. These are water supply companies in cities, both in big and small ones. Different industrial enterprises also make up a considerable part of the consumers. In household conditions titanium coagulant may be used when produced in forms of tablets. Tablets are more convenient for an individual consumer – they are dropped in water and stirred, and after a while all the contaminations precipitate leaving the water pure. Besides, titanium coagulant also has disinfectant properties based on titanium fundamental bacteriostatic properties.
- Newspapers have mentioned several times that the housing and utilities sector is reluctant to switch over to new drinking water purification systems. What do you think may be the reason for that?
- This is mainly accounted for by the great capital capacity of this industry. Construction and reconstruction of water management facilities requires considerable amount of funds.
It should be mentioned here that in late 2010, the Russian government approved the Pure Water Federal Target Programme for 2011-2017. The programme is aimed at improving drinking water quality, and increasing centralized water supply and purified waste water volume. The programme is already being implemented. Sources of financing facilities of water management and, in the first place, those of water purification, are being created. So in the nearest future the industry will see a considerable growth, including increase in the use of chemicals.
A characteristic feature of titanium coagulant is that it does not require any changes to water purification schemes applied both in Russia and abroad. Besides, coagulation is the basic primary purification process. Without coagulation, all the following processes, such as membrane filtration and ultraviolet, aimed primarily at disinfection, simply will not work. Coagulation is one of the most important stages of both suspended and dissolved contaminations removal.
-Your enterprise may be called high-tech and advanced developments applying. Do you get any preferences from local and federal authorities? Do they provide any assistance to you?
- Yes, it is true. Our company carries out deep processing of resources purchased from LUKOIL-Komi LLC, which is Yarega mineral resource operator.
As regards the federal authorities, they stimulate the water industry development via the Pure Water programme. The programme gives grants to regional budgets, thus local authorities directly participate in the work. At present, a system of basic performance criteria is being worked out for regional and municipal authorities, including housing and utilities sector criteria as well as environmental characteristics. All that provides basis for
active participation of local authorities in the use of new technologies and reagents, which give necessary results.
As to the Komi Republic and Ukhta, where the plant is situated, the authorities give a great support to our work. Vyacheslav Mikhailovich Gaizer, the Head of the Komi Republic, regularly monitors the development of our project, and encourages its implementation. For example, he ordered to work out a programme of titanium coagulant tests on Komi water supply facilities. At the present moment, possible schemes of cooperation with the regional government within the context of the Pure Water programme are being considered.
The Ukhta administration provided considerable assistance in obtaining construction permissions. Ukhta State Technical University - the republic’s leading higher education institution – is taking part in the tests. The university’s Water Supply and Sewerage Department is carrying out most serious research into the problems of municipal and industrial water supply.
The great attention paid to our work was once again proved by the participation of the region’s administration, Alexey Leonidovich Chernov, First Deputy Head of the Komi Republic, Oleg Vladimirovich Kazartsev, the head of the Ukhta administration, members of the State Council of the Komi Republic, heads of the regional regulatory bodies, Peter Vasilyevich Oboronkov, Director-General of LUKOIL-Komi LLC, and all our partners, in SITTEC Ltd’s meeting and in the ceremony of inserting a memorial capsule at the construction site.
We take a regional approach to our work. For instance, SITTEC Ltd. and the executive bodies of the Komi Republic have agreed upon the Plan of Titanium Coagulant Tests which are to be carried out on water purification facilities in 2011-2012.
Titanium coagulant tests are being carried out in Astrakhan oblast. The reagent is being tested on municipal water treatment facilities and on LUKOIL-Astrakhanenergo LLC facilities.
- What is the planned amount of investment in the project? How profitable is the project?
- The investment will total RUB 2.1 billion. This is principally capital investments in the construction planned for 2011-2012. The project’s Internal Rate of Return is around 23%. These figures were stated by IFD Kapital Group Board of Directors in 2010.
- Do you consider selling the product not only in Russia, but also abroad? If you do, which markets are you interested in, and which of them are the most promising?
- Yes, we do. SITTEC Ltd. plans to sell its product abroad as well. In particular, we have a positive experience of cooperation with partners in Southern Europe – Komikro LLC Croatian chemical company, operating in the Balkans. They have tried our product and are interested in cooperation after the production start-up.
Titanium coagulant is characterized by high efficiency which reduces the use of reagents by 10 times. Thus, the product is transportable and remains competitive even with transport leg increase.
We intend to explore foreign markets as well, but we will continue to focus primarily on Russia – on water supply organizations, city water supply companies, and large industrial enterprises, whose technological cycles require large amounts of water.
- The branch specification of our magazine makes it necessary to inquire if the titanium coagulant is used in the oil and gas sector?
- Indeed it is. On August 2, 2011, SITTEC Ltd. made a report on titanium coagulant in the Environmental and Industrial Safety Department of OJSC LUKOIL Scientific and Technical Council. The report focused on the use of titanium coagulant in the technological processes of fuel and energy complex. It considered the use of titanium coagulant for purification of water containing specific contaminations, including formation water.
The chemical is characterized by high quality of purification of waste water containing oil and petroleum products, which is an important factor for the introduction of the titanium coagulant, and which makes it widely used in all fuel and energy enterprises. As of today, titanium coagulant tests in a number of LUKOIL enterprises have been agreed upon. The tests will be carried out in oil and gas production, oil processing, and power engineering segments.
- What do you think about the Pure Water programme, and what do you think may it give to the Russian people?
- I assess the programme positively. The programme, including both regulatory control measures and projects financing, will have a double effect – it will both improve drinking water quality and increase its availability.
Official data published in 2009 showed that over 20% of drinking water samples from water supply network did not meet hygienic requirements in terms of their sanitary and chemical, and microbiological characteristics. One fifth of the Russian population still does not have access to centralized water supply sources and hence uses non-purified water.
As for the business, the Pure Water programme will catalyze the industry and increase the use of reagents for water purification. By the way, the programme notes, that Russia has a deficit in the domestic production of such reagents as coagulants, flocculants, and some other products, that modern water treatment technology requires.
- What do you think about the quality of drinking water in Russia? Does it meet the existing standards, for instance, the European and US standards?
According to half of the criteria we are still behind other countries, although some requirements on some criteria in the Russian Federation are stricter than, for example, in Europe. Thus, there is still a lot to be done for water quality improvement. For instance, one of the principle requirements – the percentage of aluminum in drinking water – is the same in Russia that in European countries (0.2 mg. per litre), but it is not always complied with by facilities. This is one of those problems, that water supply companies are tackling at the current development stage.
-Why is it necessary to drink pure water? What kind of water do you and your family drink?
- Pure drinking water and water for household use are first of all important for health. Statistics states that morbidity rate fall, particularly in so far as infectious diseases are concerned, and especially in major cities, is accounted for by the improvement of drinking water quality. Thus, the ultimate goal and target of the “Pure Water” programme is the nation’s health, the improvement of life quality and increase in life expectancy.
I myself drink bottled water. I also think it safe to use water from centralized water supply sources, which has been purified with the help of filters for household use, which are based on reverse osmosis technology.