REFINERY NEWS ROUNDUP: Processing in Russia declines in March

Processing at Russian refineries in March dropped 5.2% year on year, according to data from statistics service Rosstat, cited by the country's TASS news agency. Over the first quarter, processing rose 3%, it said.

Refineries started reducing or halting throughput in the wake of Russia's invasion of Ukraine in late February as international buyers avoided Russian-origin products due to sanctions, self-sanctioning and reputational risks.

Tuapse and the Novoshakhtinsky refinery have been among the first to halt processing, according to market sources.

Taif briefly suspended operations in April as it couldn't find a home for naphtha, but has since restarted. Naphtha was particularly hit hard, with exports estimated to be down more than 20%. Russia had been exporting naphtha at an annual rate of around 24 million-25 million mt, having almost doubled in recent years.

Russian refineries have been facing rising challenges to place feedstocks, such as fuel oil, vacuum gasoil and naphtha, due to reduced or lack of buying by the US and European refiners.

In its first-quarter results call, US refiner Valero said it was replacing Russian M-100 fuel oil with product from the Middle East and South America.

In Europe, refineries are looking to replace VGO with LSSR.

Meanwhile, refineries are looking for outlets for the excess fuel oil, since around 80% of it is typically exported, and the domestic heating season, which boosts domestic demand, has come to a close.

For now demand for bitumen, as refineries switch production away from fuel oil, remains slack as road construction is yet to start.

In a drive to cut fuel oil output, refineries that are completing their delayed cokers, such as Norsi, are expected to launch them shortly.

Meanwhile, Russian domestic crude for processing at refineries in May has traded at lower prices month on month due to a weaker Brent market and a stronger ruble, as well as weaker demand.

Spring sowing works have provided an extra outlet for distillates, which smaller refineries produce, giving them a lifeline, with runs expected to rise slightly to around 60%-70% in May, from 50% in April.

Larger refineries might also run at slightly higher throughput as they need to accommodate the crude oil that is falling out of export plans. The EU is likely to propose an embargo on Russian oil in its next sanctions package against Moscow.

Separately, Russia and Ukraine reported new damage to oil infrastructure in border regions in late April, as fighting continued. Russia's Defense Ministry said April 25 that a missile attack on the Kremenchuk refinery destroyed fuel-producing parts at the plant, and oil product storage tanks on April 24. Operations at Kremenchuk have been suspended since an earlier attack on April 2. Until the attacks, Kremenchuk had been the only refinery supplying the local market after the Shebelinka GPP refinery was taken offline Feb. 26 due to the threat of shelling following the invasion. Ukraine's Odesa and Lysychansk refineries were hit by airstrikes in April, though both had been out of action for more than 10 years.

Russian officials said April 25 that a fire had broken out at a Russian oil storage site in the western Russian city of Bryansk. The facility is located around 140 km from the Ukrainian border. The Russian Energy Ministry said the main fuel reserves in the region were unaffected, with one diesel tank damaged in the incident.

In other news, Turkmenistan's two refineries, Turkmenbashi and Seydi, produced 6.4% more 95 RON gasoline than planned in the first quarter, with production rising 12.4% year on year, according to local media reports.

The two refineries also processed 10.3% more crude oil than planned.

During the first quarter the refineries produced for the first time 98 RON gasoline, Jet A1 and marine gasoil, which meet international standards.

NEW AND ONGOING MAINTENANCE

UPGRADES

LAUNCHES

Near-term maintenance

New and revised entries

** Fuel-producing parts of Ukraine's largest oil refinery, UkrTatNafta, were destroyed April 24 by missiles, as were oil products storage tanks, Russia's defense ministry said April 25. A refinery spokesman declined to comment. Kremenchug stopped operations after being damaged in an attack April 2.

** Russia's Saratov and Taif refineries restarted operations in late April after resuming oil products sales on the St. Petersburg exchange, according to market sources. Saratov refinery halted light product sales on the St. Petersburg exchange mid-February ahead of works which started March 5 and had been deferred from October and November. The maintenance was initially expected to be completed in mid-April but has been extended.

Taif refinery has also restarted operations after resuming sales. Taif halted processing earlier in April due to lack of outlets for its production, primarily naphtha, and a lack of ullage in its storage tanks, local media reported. Taif's closure has also been accelerated as Nizhnekamskneftekhim, belonging to petrochemical company Sibur, has decided to stop taking Taif's naphtha, but the two companies have agreed on May deliveries.

** Russia's Astrakhan refinery, which predominantly processes gas condensate and produces only light products, is starting its maintenance in early May. The works are due to last until around mid-June. The refinery halted sales of oil products on the St. Petersburg exchange in late April ahead of the start of its planned maintenance. The refinery typically carries out works in May and June. Last year its maintenance started in May but was extended until October.

** Russia's Surgut gas processing plant is due to carry out works in June and July, set to last around two-three weeks. Surgut halted production temporarily last summer following an incident during the summer at the Novy Urengoy facility that prepares feedstock for the plant. It restarted in September.

** Russia's Komsomolsk refinery halted sales of gasoline and diesel on the St. Petersburg exchange in late April ahead of the start of its maintenance. The refinery is due to carry out works in May and June.

** Russia's Kuybishev refinery is expected to carry out works in the second half of May.

Existing entries

** Belarus' two refineries -- Mozyr and Naftan -- have been forced to reduce throughput due to sanctions pressures. Naftan processes 11,700 mt/day crude oil and Mozyr about 13,700 mt/day. Mozyr processed 8.99 million mt in 2020, or around 24,000-25,000 mt/day, the report also said. Naftan also brought forward its planned maintenance to March after losing some export markets. Naftan used to export products to Ukraine, but Ukraine halted these after Russia's invasion.

** Maintenance operations for Socar's Heydar Aliyev refinery and the integrated Azerkimya petrochemical plant will involve the refinery shutting down for 50 days from April 5, with some units of Azerkimya dependent on feedstock from the refinery halting production for the same period. The work being carried out includes both repairs and maintenance, and work related to the ongoing expansion and upgrading of the refinery, which in turn involves the merging of units belonging to the Heydar Aliyev refinery with those of the smaller Azerneftyag plant. Production of gasoline, diesel and kerosene will continue through the shutdown at units of the former Azerneftyag plant, and any shortfall between output and domestic demand will be met from stocks built up at the refinery since the start of February.

** Russia's Orsk refinery has been carrying out partial works. Works involve replacing some elements in the primary distillation unit ELOU-AVT-3 (CDU-VDU 3), which will result in a higher output of VGO. The works are due to end in the first half of April.

** Shebelinka GPP, Ukraine's second-largest producer of diesel and gasoline that operates under the Shebel brand name, suspended operations Feb. 26.

** Partial works will be carried out in March at Russia's Ryazan refinery.

** Partial works will be carried out in March at Russia's Ufaneftekhim. The hydrocracker at Ufaneftekhim, offline due to a fire since 2016, was expected back in May following repairs.

** Output and exports of some products have been affected by the fire at Russia's Antipinsky refinery in early January, according to trading sources. The coker has been halted after the fire at a fractionation column.

** Russia's Novokuybishev refinery is set to carry out major works in April.

** Russia's Omsk, Moscow and Yaroslavl will carry out partial works in April.

** Russia's Volgograd refinery is due to carry out partial works. It is also in the process of upgrading one of its CDU VDU units.

** Maintenance at Kazakhstan's Shymkent could be deferred to November and possibly to 2023.

** The Kazakhstan government is looking at the possibility for maintenance at Pavlodar to take place from late June until mid-July, after the end of sowing works.

Upgrades

New and revised entries

** Belarus' Naftan has started producing jet fuel at the upgraded Hydrotreater No3 after launching its third part. The unit has four parts which produce desulfurized gasoline, diesel and jet fuel. The construction works on the modernized unit have been completed in Nov 2021 and in Jan 2022 the unit started receiving gasoil feedstock from the newly launched delayed coker.

The refinery has previously said that the delayed coker is expected to reach full capacity in Q2.

** Russian oil company Tatneft said its Taneco refinery continues the construction of a second hydrocracker which has a 1.2 million mt/yr VGO feedstock capacity. Its launch will further increase the refinery's depth of processing. Jet fuel output will rise by 21,100 mt/month and diesel output by 56,600 mt/month. The refinery has a 2.9 million mt/year hydrocracker.

Last year the refinery launched in test mode a gas fractionation unit, a second delayed coker and a diesel catalytic dewaxer.

** The Turkmenbashi refining complex in Turkmenistan is expected to commission this year a complex including a delayed coker and a solvent deasphalter. Construction started in 2019 and a significant progress was reported in 2021..

Existing entries

** Russian oil company Lukoil said that its Norsi refinery is in the process of completing the construction of the deep processing complex, which includes a delayed coker. The new complex will allow the refinery to reduce the output of fuel oil and reach 97% depth of processing. It will also secure synergy with the already operating units of the catalytic cracker. The yield of light products will increase to 74%. In 2021, the refinery launched a new isomerization unit. It currently is working on the project documentation for the propylene complex.

The deep processing complex will allow the refinery to reduce fuel oil output by 2.6 million mt/year and increase 10 ppm diesel output by 700,000 mt/year.

As a result of the launch, Lukoil's refineries' fuel oil output will be less than 4% and light products yield 75%.

The deep processing complex includes a 2.110 million mt/year delayed coker; a diesel and gasoline hydrotreater, with 1.5 million mt/year capacity; a hydrogen unit, with 50,000 Nm3/hour capacity; a gas fractionation unit, with 425,000 mt/year capacity; and a sulfur unit, with 81,000 mt/year capacity, S&P Global Commodity Insights reported previously.

** Russia's Novokuybishev aims to complete the construction of the hydrocracker and launch it in test mode by the end of 2022-early 2023, according to local media reports, citing a refinery source. Construction started in 2021.

** Russia's Syzran refinery has completed assembling the catalytic distillation column at a new MTBE unit. The MTBE units along with an FCC complex under construction is part of the refinery's modernization. Once the new units are completed, the refinery will significantly increase the output of high octane gasoline.

** Russia's Glavgosexpertiza, the state construction and engineering auditor, has approved the construction of a gasoline stabilization unit at Russia's Afipsky refinery which will produce feedstock for hydrogen production. The refinery, which is in the process of modernization, is working on a hydrocracking unit and the sulfur production unit. The upgrades will raise the depth of processing to 99.2% from 80.7% and enable the production of Euro 5 diesel. According to the Krasnodar regional administration, the hydrocracker is due for completion in 2023. Separately, the Afipsky refinery is planning the construction of a 1.6 million mt/year delayed coker.

Safmar Group is reorganizing two of its refineries by merging the Krasnodar refinery to the Afipsky refinery in southern Russia, which will retain the name Afipsky refinery. The Krasnodar refinery will specialize in primary processing and the Afipsky refinery in secondary processing.

** The hydrocracker at Ufanefteckhim, which has been offline due to a fire since 2016, is expected back in May following repairs.

** An expansion is considered for Kazakhstan's Shymkent refinery to cover the country's rising products demand, according to a government website. The existing land allows for the refinery's capacity to be expanded from 6 million mt/year to 12 million mt/year. In order to provide sufficient feedstock, however, the Atyrau-Kenkiak pipeline needs to be expanded as well, according to the energy ministry Bolat Akchulakov.

** Russia's Volgograd refinery is in the process of upgrading one of its CDU VDU units. Unit ELOU-AVT-5 (CDU VDU 5) will be undergoing reconstruction over the course of 2022. The refinery has four primary processing units.

** Russia's Omsk is in the process of launching the newly built diesel hydrotreater and dewaxer unit. The new unit, with 2.5 million mt/year of feedstock capacity, will replace two outdated units. The diesel produced at the new unit will have cold properties of up to minus 40 degrees Celsius. Omsk has also successfully completed the construction of a delayed coker. The delayed coker, along with a hydrocracker, will form part of the deep crude oil processing complex of the Omsk refining complex. Finalizing of the works in the deep processing complex will increase the depth of processing up to 100%. The 2 million mt/year complex will enable the refinery to increase the depth of processing and regulate yields of gasoline, jet fuel and lubricants feedstock. The company has also started assembly of electricity equipment at the catalytic cracker at Omsk as part of the unit's upgrade. Omsk has also completed the installation of the main equipment at the primary CDU-VDU processing complex. The complex, with 8.4 million mt/year of capacity, will allow the refinery to take six outdated units out of service.

Separately, the refinery started a project to upgrade the AVT-10 primary processing complex, which has a capacity of 8.6 million mt/year.

** Socar confirmed that the new catalytic cracking unit at Azerbaijan's Heydar Aliyev is an FCC cracker which will produce dry gas, C3 and C4 LPG, stabilized FCC naphtha, LCO and slurry. The refinery has signed license and design agreements with Axens. The Heydar Aliyev refinery is currently undergoing a full reconstruction and modernization, with the addition of new units. New gas flare, steam generator, demineralization and water cooling facilities will be commissioned in January and February. Socar plans to start production of Euro 5 diesel by mid-2022 and Euro 5 gasoline (Ai-92-95) by mid-2023, both dates having been pushed back due to the pandemic. The ongoing work includes replacing all the units of the refinery except one, and in the process, increasing the capacity to 7.5 million mt/year from 6 million mt/year.

** Russia's Rosneft plans a construction of a hydrocracker complex at the Ryazan refinery. The new complex, with 2.2 million mt/year capacity, will help the refinery to increase the depth of processing and achieve higher margins through the conversion of heavy into light products. It will include a hydrocracker, as well as hydrogen and sulfur units.

** Russia's Komsomolsk carries out a large-scale project involving the construction of a hydrocracker and hydrotreater with 3.65 million mt/year capacity, which will enable it to increase the output of Euro 5 diesel. Once launched, the refinery's depth of processing will increase to 92%.

** Russia's Salavat is upgrading the catalytic reformer, which will increase its feedstock capacity from 1 million mt/year to 2 million mt/year.

** Russia's Moscow refinery has started the construction of its deep processing complex. Works have started on the delayed coker, hydrogen and hydrocracker units, which are part of the complex, due for completion in 2025. The delayed coker, which will have a 2.4 million mt/year capacity, will enable the refinery to increase production of road fuels and start producing petroleum coke. The 2 million mt/year hydrocracker, a sulfur production unit, and a hydrogen unit are also part of the complex. The complex will enable the refinery to reach almost 100% depth of processing and halt the production of fuel oil.

** Lukoil plans to build a new integrated MTBE and alkylation plant at its Perm refinery in Russia, as well as a new FCC and Merox units. Lukoil will build a catalytic cracker complex at the plant. The complex will have 1.8 million mt/year feedstock capacity. It will include a catalytic cracker, as well as a high-octane gasoline components unit. The complex is expected to be launched in 2026 and will increase the output of high-octane gasoline.

It will also allow the refinery to produce propylene to be used as petrochemical feedstock.

** Russia's Novoshakhtinsky has started the construction of its gasoline complex. It aims to produce around 670,000-680,000 mt/year and construction is due to start in 2021. The complex is due for launch in Q1, 2024. It will process up to 894,000 mt/year naphtha. It will include a gasoline hydrotreater, an isomerization unit and a catalytic reformer and will enable the refinery to produce Euro 5 gasoline. Separately, the refinery plans to launch a 1.8 million mt/year diesel hydrotreater in Q3 2024. Russia's Glavgosexpertiza, the state construction and engineering auditor, approved the construction of a sulfur unit as part of the diesel hydrotreater complex. In Q1, 2027 it expects to launch a deep-processing complex, which includes a hydrocracker and delayed coker. It plans to launch an LPG production unit in Q1, 2023. Following the completion of the upgrades, which are part of the third stage of upgrades, the refinery will be able to produce up to 3.2 million mt/year of diesel and 400,000 mt of petroleum coke.

** Tests are underway at the new hydrocracker at Belarus Mozyr refinery. The hydrocracker, along with a hydrogen and sulfur units, is part of the H-Oil complex.

The completion of the hydrocracker H-Oil complex at Mozyr will cut fuel oil output and increase light products. The complex, with feedstock capacity of 3 million mt/year, will increase its light products yield to 70% and depth of processing to 90%.

** Russia's Yaisky refinery is starting the third phase of its upgrade. By 2026, it plans to complete a dewaxing complex with 2.6 million mt/year capacity and a delayed coker with 1.34 million mt/year capacity. The commissioning of those complexes will increase its depth of processing to 93% and enable it to produce diesel with improved cold properties. Earlier this year, it completed the second phase of its upgrade, including a deep processing complex that enabled it to produce over 700,000 mt/year of Euro 5 gasoline. The complex includes a gasoline hydrotreater, isomerization and CCR unit.

** Russia's Orsk continues with its upgrades, including the construction of the delayed coker complex. It is currently receiving the equipment for the delayed coker complex. The refinery started building the delayed coker in Q3 2020 and plans completion in Q3 2023. Safmar plans to build new deep processing complexes at the Orsk refinery. They include a 1.2 million mt/year delayed coker and a gasoline dewaxer with 600,000 mt/year capacity. It also plans an upgrade of the hydrocracker complex and the isomerization unit which would increase their productivity by more than 15%. The hydrocracker is set for launch in Q3 2022. The refinery's depth of processing will increase from 76.7% to 98.1% by 2022-23. Separately, the refinery is building a new unit for hydrotreatment of distillate products from the delayed coker unit. The unit can also be used for hydrodesulfurization of diesel from the primary processing units.

** Russia's Angarsk has started assembling the main column at the catalytic cracker complex. The assembly of the column is part of the refinery's upgrade. The GK-3 unit is aimed to process 130 mt/hour vacuum gasoil and 520 mt/hour desalted crude oil will produce over 43 components.

** Russia's Kirishi is planning an upgrade for "the conversion of heavy oil residues".

** Russia's Yanos refinery in Yaroslavl has started building a delayed coker complex. As a result, it will halt fuel oil output. Its depth of processing will exceed 99% and light products yield -- 70%. Construction is scheduled for completion in 2024. The complex will be built in two stages -- initially a delayed coker will be built which will enable the processing of more than 3.4 million mt heavy fractions, followed by a naphtha hydrotreater and light gasoil coker. They will provide feedstock for gasoline and diesel.

** Russia's Achinsk refinery will increase its depth of processing to over 95% and the light products yield to 88% upon completion of its upgrades, which will lead to the almost complete halt of fuel oil output. It is building a hydrocracker with integrated hydrotreater. Its launch will enable it to almost double the output of motor fuel aimed at covering domestic demand predominantly in Siberia and the Far East. It is also building a delayed coker complex.

** Russia's Ilsky is planning to launch a new gasoline complex, including a 1.5 million mt/year CCR and isomerization units, around the second half of 2023 which will enable it to produce high-octane gasoline components and gasoline meeting Euro 5 standards, LPG and xylenes. After launching the gasoline complex, it aims to start building a diesel hydrotreater, with construction likely to be completed in 2024.

** Uzbekistan's Bukhara will use Honeywell UOP technology to increase crude conversion and produce Euro-5 standard gasoline and diesel. Honeywell will provide "licensing and basic engineering design services" for a new naphtha hydrotreater, RFCC, SelectFining and Merox units. The existing diesel hydrotreater will be revamped. Uzbekneftegaz has decided to proceed with an upgrade of its Bukhara and Fergan refineries and put on hold building a new refinery in the Jizzakh region.

Uzbekistan's Fergan refinery between 2020-2023 aims to commission hydrocracking process in a staggered way which will allow it to produce Euro-5 regular gasoline 92 RON as well as diesel.

** Russia's Rosneft is working towards launching the hydrocrackers that it has built at four of its refineries -- Achinsk, Komsomolsk, Novokuybishev and Tuapse.

Rosneft is expanding the capacity of its existing delayed coker at Novokuybishev.

Rosneft plans to complete its refinery modernization program by 2025. The program includes construction and reconstruction of over 50 units, with work on more than 30 of the units having been finished.

** Kyrgyzneftegaz plans to upgrade its Jalal-Abad refinery. Its strategy involves a unit for secondary processing of fuel oil.

** Kazakhstan's Pavlodar refinery is looking to build a unit for the purification of LPG and has selected a Merox technology.

** The launch of four secondary units at the Mariisky refinery has been delayed. As per plans, after upgrades it expects to increase the AT-2's capacity to 1.4 million mt/year from 900,000 mt/year and the VDU capacity to 1 million mt/year from 476,000 mt/year.

** The next stage of upgrades at the Antipinsky refinery in Russia involves increasing the capacity of crude and refined product pipelines. Antipinsky, which can process 9 million-9.5 million mt/year of crude, currently receives 7.5 million mt/year of crude.

Launches

Existing entries

** Russia's Rosneft could launch a planned new refinery as part of its VNHK (East petrochemical complex) in the Far East in 2029 and a petrochemical plant in 2026.The Far East refinery is planned to process 12 million mt/year of crude, while the petrochemical plant will have 3.4 million mt capacity. Production will include 1.8 million mt gasoline, 6.3 million mt diesel and 4.5 million petrochemical products annually.

** A new refinery is planned to be launched in Georgia, at the Black Sea port of Kulevi, in 2024. Construction of the 4 million mt/year plant is due to start in 2021. The refinery is expected to have 98% depth of processing and produce Euro 5 and 6 gasoline and diesel and thus reduce Georgia's import needs for oil products by 15%-20%.

** Russia's Khabarovsk refinery plans to build a second phase to the plant close to the existing site. The second phase would double the refinery's capacity to 10 million mt/year and aims to cover gasoline demand in the far east of Russia. The company is seeking an investor in the Asia-Pacific region for the second phase, which includes an FCC, hydrotreater and delayed coker.