According to WPB, Black Sea Petroleum is preparing a major expansion of its Kulevi refinery on Georgia’s Black Sea coast, with plans to invest approximately €650 million more by 2029 and raise total refining capacity to as much as 4.5–5 million metric tons per year by 2028. Road bitumen is explicitly included in the refinery’s future product slate, with production previously targeted to begin in the first quarter of 2027 for both the domestic Georgian market and exports.
The development is significant for the regional bitumen market because it could introduce a new road-binder production source into the Black Sea and Caucasus region. Georgia currently depends heavily on imported petroleum products and road-construction materials, and a domestic bitumen producer located directly on the Black Sea could potentially serve both local demand and neighbouring export markets.
Black Sea Petroleum says it has already invested approximately €200 million in the refinery project. The next phase is substantially larger, with around €650 million of additional investment planned through 2029 as the company expands processing capacity, storage infrastructure and the range of finished petroleum products.
Current refining capacity has been described at approximately 1.2–1.5 million metric tons per year. The company’s development plan aims to increase that figure to around 4.5–5 million tons annually by 2028, which would make Kulevi a materially larger refining operation than it is today.
That figure should not be confused with bitumen production capacity. The 4.5–5 million-ton target refers to total refinery throughput, while Black Sea Petroleum has not publicly disclosed the design capacity of a dedicated road-bitumen unit, the percentage of refinery residue expected to be converted into bitumen or the annual volume of road binder it plans to sell.
This distinction is essential when assessing the potential effect on the regional market. A large refinery does not automatically become a large bitumen producer. Road-bitumen output depends on crude quality, refinery configuration, residue-management strategy and the economics of competing products.
Black Sea Petroleum’s planned product range includes gasoline, diesel, aviation fuel, liquefied petroleum gas, marine fuel and bitumen. This means road binder will compete within the refinery’s product system with other higher-value fuels and heavy-product outlets.
The company had previously announced that road-bitumen production would begin in the first quarter of 2027. The stated objective was to supply both Georgia’s domestic market and export customers, making bitumen one of the first products with a specifically identified regional-sales role.
The current expansion announcement strengthens that earlier plan by placing bitumen within a much larger refinery-development strategy. It suggests that the company views road binder as part of the commercial product portfolio of the expanded Kulevi complex rather than as a minor by-product.
Georgia’s location gives the project strategic relevance. The country sits between the Black Sea, the South Caucasus and land corridors linking Central Asia, Turkey and the wider region, creating several potential routes for petroleum-product distribution.
Kulevi itself is particularly important because it is located directly on Georgia’s Black Sea coast and is integrated with marine-terminal infrastructure. This potentially allows crude to arrive by sea and finished products to be exported by vessel without requiring long inland movements before reaching a port.
For bitumen, coastal access can be commercially significant. Bulk road binder requires heated storage and specialized transportation, while packaged material can move through conventional cargo channels. A refinery located beside a maritime terminal can therefore have logistical advantages if dedicated heated tanks, loading systems and appropriate vessels are available.
However, those specific bitumen-handling facilities have not yet been fully detailed publicly. There is currently no confirmed public specification for dedicated heated bitumen storage capacity, marine loading rates, packaging lines or annual export volume at Kulevi.
The company’s current infrastructure expansion nevertheless shows that storage is becoming a larger part of the project. A new 40,000-cubic-metre storage facility has been completed, while another 40,000 cubic metres of tank capacity is reportedly in the final stages of development.
Those tanks should not automatically be interpreted as bitumen tanks. Storage facilities at a multi-product refinery can be assigned to crude oil, intermediate streams, gasoline, diesel or other products depending on design and operating requirements.
Bitumen requires specific storage conditions because it must normally be maintained at elevated temperatures to remain pumpable. If Kulevi intends to export bulk road binder, dedicated heated tanks and insulated transfer systems will become essential components of the logistics chain.
The crude slate will be equally important for future bitumen production. Black Sea Petroleum says the refinery is currently processing only crude oil of non-Russian origin, and recent supplies have included Libyan El Sharara crude.
The refinery recently received its second cargo of El Sharara, with the two latest shipments together amounting to approximately 90,000 metric tons. This demonstrates that the plant is already establishing alternative crude-supply links through the Black Sea.
El Sharara is a relatively light, low-sulphur crude. From a bitumen perspective, crude quality matters because lighter crude generally produces less heavy vacuum residue than heavier crude grades, all else being equal.
This does not mean El Sharara cannot be processed in a refinery that also produces bitumen, but the crude slate will influence the amount and characteristics of residue available for road-binder manufacture. A refinery seeking stable bitumen output may need to optimize or diversify its feedstock depending on its process configuration.
The future 4.5–5 million-ton capacity therefore says little by itself about potential bitumen tonnage. Two refineries with identical crude-processing capacity can produce very different quantities of bitumen depending on crude type and the configuration of vacuum distillation, conversion and residue-processing units.
The presence of conversion units also matters. If heavy vacuum residue is routed into cracking or coking processes to generate lighter transport fuels, less material remains available for bitumen production.
Conversely, a refinery designed to preserve suitable residue for road-binder production can allocate part of that stream to penetration-grade, viscosity-grade or modified bitumen, provided product specifications can be achieved consistently.
Black Sea Petroleum has not yet published sufficient technical detail to determine which of these approaches will dominate at Kulevi. The safest interpretation is therefore that the refinery has a confirmed strategic intention to add road bitumen to its product slate, but the scale of that business remains unknown.
For Georgia, even moderate domestic bitumen production could be commercially meaningful. Road construction and rehabilitation require regular road-binder supply, and dependence on imports exposes buyers to freight, border logistics, foreign exchange movements and supply disruptions in neighbouring producing countries.
A local source could reduce some of those risks, particularly for projects located within Georgia. Domestic production could shorten the logistics chain and reduce exposure to cross-border trucking or longer marine supply routes.
Whether it lowers prices is less certain. Local production does not automatically guarantee cheaper bitumen because the final price will still depend on crude-feedstock cost, refinery economics, taxes, storage, heating, transportation and the competitive position of imported material.
The project could also affect Georgia’s import structure. If the refinery produces enough road bitumen to cover a meaningful share of domestic requirements, some imported volumes could be displaced.
The scale of that displacement cannot yet be estimated because neither Kulevi’s planned annual bitumen production nor Georgia’s future road-construction demand under the 2027–2029 investment cycle has been matched publicly against the refinery programme.
The export opportunity may be more strategically interesting. Georgia is positioned close to markets in the Caucasus and the Black Sea, while road-binder demand also exists across neighbouring countries where local refinery supply can be limited or seasonal.
Potential markets could include Armenia and other regional buyers, but commercial flows would depend on transport economics, border procedures, product specifications and competition from suppliers in Turkey, Russia, Azerbaijan, the Middle East and the Mediterranean.
Maritime exports would open another set of markets if Kulevi develops bulk-bitumen loading capability. The Black Sea connects Georgia with Turkey, Romania, Bulgaria and other trading routes, although specialized heated tanker availability would remain a key requirement.
Packaged bitumen could have a wider logistical reach because drums or bags can be moved by general cargo, truck or container rather than specialized heated vessels. Black Sea Petroleum has not yet disclosed which packaging formats it intends to prioritize.
The 2027 target is also important because it places bitumen production ahead of the full refinery-expansion deadline. The company aims to raise total refinery capacity by 2028, while road-bitumen production has been targeted for the first quarter of 2027.
If that schedule is maintained, bitumen could enter the product slate before the complete 4.5–5 million-ton expansion has been achieved.
That sequencing suggests the company may not need to wait for the entire refinery project to be completed before entering the road-binder market. However, the exact facilities required for the 2027 start have not been detailed sufficiently to determine the initial production scale.
The difference between commissioning and full commercial output should also be kept clear. Starting production in the first quarter of 2027 would not necessarily mean the plant immediately reaches its eventual annual bitumen capacity.
New units typically require commissioning, product testing, specification validation and market qualification before stable commercial production is achieved. Road agencies and asphalt producers may also require technical documentation before adopting a new local source.
Product specification will therefore become one of the most important issues to monitor. Georgia and potential export markets use defined standards for road bitumen, and the refinery will need to demonstrate consistent penetration, softening-point, viscosity and ageing properties depending on the grades it intends to sell.
The company has not yet publicly identified the exact road-bitumen grades planned for production. Without that information, it is too early to determine which segments of the regional paving market Kulevi intends to target.
The refinery’s non-Russian crude strategy adds another commercial dimension. By emphasizing alternative crude origins, the project is attempting to build a supply chain that is less dependent on Russian feedstock.
The arrival of Libyan crude indicates that Black Sea Petroleum is already testing or establishing marine supply routes from the Mediterranean and other non-Russian producing regions. This could diversify feedstock risk but may also expose refinery economics to longer shipping distances and changing Mediterranean crude differentials.
For bitumen, a diversified crude slate can be either an advantage or a challenge. It can improve supply security, but maintaining consistent binder quality becomes more complex when crude characteristics change substantially.
Refineries producing road bitumen therefore need careful crude selection and process control to ensure product properties remain within specification even when feedstock origin changes.
The expansion also comes as Georgia seeks to strengthen its position as an energy and logistics corridor. A larger coastal refinery can reduce dependence on imported finished products while potentially creating new export flows through Black Sea infrastructure.
Kulevi’s location near existing oil-terminal assets could support that strategy. The commercial value will depend not just on refining capacity but on how efficiently the plant integrates storage, marine loading, road and rail links and finished-product distribution.
For the regional bitumen market, this makes the project more important than a simple increase in crude-processing capacity. Road bitumen is explicitly identified as a future product, and the planned 2027 start creates a relatively near-term potential addition to Black Sea and Caucasus supply.
At the same time, the lack of a published bitumen-unit capacity prevents any credible estimate of how much regional supply will change. It would be incorrect to derive bitumen output from the refinery’s overall 4.5–5 million-ton processing target.
The same caution applies to export expectations. The company has stated that bitumen will serve both domestic and export markets, but no specific export volume, destination mix or long-term sales contract has yet been announced publicly.
The first major indicator will therefore be the commissioning of the road-bitumen production facilities in 2027. Confirmation of the unit design, production capacity and planned grades would allow the potential effect on Georgia’s import balance to be assessed more accurately.
Storage specifications will be another important indicator. Dedicated heated-bitumen tanks would provide stronger evidence that the project is being prepared for regular bulk distribution rather than limited production.
Marine-loading infrastructure would be even more important for export potential. If Kulevi installs dedicated heated loading systems capable of serving specialized bitumen tankers, the refinery could compete in a much broader Black Sea market.
Without such systems, early exports may rely more heavily on road transport or packaged cargoes, limiting the radius in which the product can compete economically.
The company’s investment schedule should also be monitored. A €650 million expansion through 2029 represents a large capital commitment, but refinery projects are exposed to construction delays, financing conditions, equipment procurement and permitting risks.
The target of reaching 4.5–5 million tons per year by 2028 should therefore be treated as a development objective rather than existing capacity.
The same applies to road-bitumen production in the first quarter of 2027. The timetable is commercially significant, but actual start-up and stable output will need to be confirmed once the relevant facilities are commissioned.
For asphalt producers and road contractors in Georgia, a domestic source could introduce a new procurement option relatively soon if the project remains on schedule. This could increase competition among suppliers even before Kulevi reaches its full planned scale.
For neighbouring markets, the impact will depend on whether Kulevi can produce specifications that match local requirements and deliver them at a competitive landed cost.
The refinery’s location gives it several theoretical advantages, but final competitiveness will be determined by feedstock economics, production yield, transportation, packaging and the price offered by existing regional suppliers.
The development should therefore be viewed as an emerging supply source rather than a confirmed large-scale market shift.
What is already clear is that Black Sea Petroleum has moved bitumen from a general possibility into its declared product strategy and has attached a specific 2027 start target to road-binder production.
What remains unknown is equally important: the dedicated bitumen capacity, the expected annual output, the grade slate, the share allocated to exports, the type of storage and loading infrastructure and the countries expected to receive the first cargoes.
For the Black Sea and Caucasus bitumen market, those details will determine whether Kulevi becomes primarily a domestic Georgian supplier or develops into a broader regional export hub.
If the 2027 start is achieved and subsequent expansion proceeds on schedule, Georgia could gain a new domestic source of road bitumen at a time when road-infrastructure investment across the wider region continues to support binder demand. The project has the potential to alter regional supply patterns, but its eventual market impact cannot be quantified until Black Sea Petroleum discloses the scale and technical configuration of its bitumen operation.
By WPB
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