Lukoil has commissioned the first phase of the gas processing unit at the Stavrolen plant in Budennovsk, Russia.
Using this project, the company will be able to completely use associated petroleum gas produced from the fields in the northern Caspian.
Lukoil can also supply own gas to new power generation facilities of the group located in the Stavropol region and begin production of petrochemicals.
The Stavrolen plant has a capacity of 2.2 bcm of raw gas per year.
Russian Federation deputy prime minister Arkady Dvorkovich said: "The startup of this gas processing plant by Lukoil is especially symbolic in the beginning of the year when the company celebrates its 25th anniversary, and is not only an important event for the region but also an excellent example of the consistent and sound investment decisions across the country."
Lukoil president Vagit Alekperov said: "The startup of the first phase of the gas processing unit at Stavrolen plant is one of a wide range of projects, which Lukoil plans to put in operation in 2016.
"I am sure that each of them will have a significant impact, not only on the economic development of the company but also on the respective regions where they are located."
In a separate announcement, the company said it plans to supply around two million tonnes of petroleum to Iran in 2016 in exchange for oil, Russia Beyond The Headlines reported.
Furthermore, Lukoil is set to purchase 250 petrol stations in the Netherlands, Belgium and Luxembourg.
