Part of the funds will come from a loan from the European Bank for Reconstruction and Development (EBRD). The bank signed a $300 million loan agreement with LUKoil on May 21 to finance the company's environmental program.
"We will use these funds to reduce atmospheric emissions, to build purification facilities at our oil refineries, and also to process associated gas," CEO Vagit Alekperov said at a forum organized by the EBRD in the Volga city of Kazan.
Alekperov said next year LUKoil would build associated gas processing facilities at a deposit of its subsidiary Geoilbent in Western Siberia.
These facilities will be able to process 600 million cubic meters of associated gas, the chief executive said.
Alekperov urged all domestic oil companies to process associated gas, rather than flaring it, to prevent emissions of harmful gases into the atmosphere, and said that the gas could be used to generate thermal power.
LUKoil alone annually flares about 450 million cubic meters of associated gas, while oil deposits in Western Siberia cumulatively burn a total of about 6 billion cubic meters of the gas each year, Alekperov said.
