Private-sector Black Sea Petroleum (BSP) has built and operates the first refinery at Georgia's Black Sea port of Kulevi. Crude runs at the 24,000 b/d mini-refinery started in the autumn and BSP is already planning expansions over the next two years. Co-owner and chief executive David Potskhveria told Argus about the BSP's growth plans in a recent interview. Edited highlights follow:
What is the refinery's capacity and output?
Crude processing started in autumn 2025. Nameplate capacity is 1.2mn t/yr, but runs can reach up to 1.5mn t/yr, depending on crude quality. We produce gasoil, naphtha and fuel oil — product quality also varies according to crude quality.
What crude has BSP processed so far?
Since start-up, we have processed Azeri crude delivered by rail and imports by sea through the Kulevi oil terminal, from Novorossiysk port in Russia. We pay close attention to the origin of supply — in partnership with Georgia's customs authorities — and ensure strict compliance with our internal requirements.
BSP has global ambitions and transparency in procurement and sales is fundamental. BSP uses the LSEG World Check KYC [financial risk and compliance] screening system, it seeks legal opinion and advice from UK and Swiss law firms, and maintains continuous dialogue with Georgian state institutions.
Diversified crude sourcing is important for us to enable entry to premium European product markets and we are moving towards greater supply diversification. We expect the share of crude imports from Turkmenistan, Kazakhstan and Azerbaijan to rise in April-May. Availability by rail is commercially important — rail logistics are often more attractive for BSP than seaborne imports. Our goal is to maximise supplies using alternative routes.
Do you consider using dirty products as secondary feedstocks?
We consider the economics of all potential feedstock options and assess them continuously, depending on the pace of refinery expansion.
What new units are planned?
Total investment to bring the initial capacity on line was $150mn, covering not only the first phase process units, but also utilities, infrastructure and offsite installations. This groundwork significantly shortens the timeline and cost for future refinery development and expansion.
We plan to commission a vacuum block and bitumen unit in the first half of 2027, enabling vacuum gasoil and bitumen production. Construction of a second crude unit, of 3.3mn t/yr [66,000 b/d], and a Merox jet-kerosine unit began in March and start-up is scheduled for early 2028. The addition of the Merox unit reflects strong demand for jet fuel regionally and in Europe.
The project under way also includes a 120,000m³ expansion of storage capacity to 170,000m³, which will allow the refinery to operate at 4.5mn t/yr from early 2028, with the potential for throughputs of up to 5mn t/yr [100,000 b/d].
When will the refinery begin producing motor fuels compliant with Euro 5 vehicle emissions standards and where will these products go?
Euro 5 gasoline and diesel production should start by the end of 2028. We are working closely with our technical partner, US company Honeywell UOP, and have already signed initial contracts for the design of secondary processing units, including isomerisation, reforming and hydrotreatment. All the necessary infrastructure and utilities are in place for these additions — the upgrades and expansion are part of the refinery's approved master development plan.
The Georgian market is the priority — domestic sales will come first, even once Euro 5 products are available. Exports to neighbouring markets would be on a residual basis, only after local demand is met.
How are logistics structured for the refinery?
We have a long-term contract with [Azeri state-owned] Socar's Kulevi Terminal, which handles crude imports and product exports. The terminal contract reflects for our planned capacity expansion and future needs. BSP leases 10 storage tanks at Kulevi Terminal for crude and products.
Will your trading focus be on spot sales or long-term contracts?
We are buying and selling crude and products at Kulevi through closed tenders, on a cargo-by-cargo basis, while working alongside all main trading companies active in the region. Spot trading offers the highest margins. But our team is flexible and open to alternative commercial structures and pricing formulas where economically attractive.
