REFINERY NEWS ROUNDUP: Some maintenance continues in Russia

Some refinery maintenance continues in Russia in July while the market is starting to prepare for the autumn turnarounds.

Meanwhile, Russian plants are boosting runs on good margins. According to Kommersant daily, Russian refinery throughput could reach 24 million mt (around 5.6 million b/d) in July as oil companies restore runs to last year's levels.

In July 2021, Russian refineries processed 23.51 million mt, according to energy ministry data. Recent data has been unavailable as Russia stopped publishing it shortly after it invaded Ukraine.

Apart from strong summer domestic demand, partially restored product exports to new destinations in Africa and the Middle East have also helped support refinery operations.

Processing in June rose 8% month on month to 5.4 million b/d, according to the Russian Center for Energy Development, although it was below the June 2021 level.

According to Moscow-based consultancy Petromarket, Russian refinery margins in June sharply exceeded the level seen at the beginning of 2022, thanks to rising state subsidies as well as the wider difference between the price of crude and products, known as crack spreads.

As of June 30, complex refining margins increased 160% from February 22 to Rub21,000/mt ($382/mt), while simple refining margins quadrupled, reaching Rb5,000/mt over the same period, Petromarket told S&P Global Commodity Insights.

Finding alternative outlets for fuel oil and the switch to bitumen production in the summer months has also provided a relief to less complex refineries whose storages were flooded with fuel oil as international buyers avoided taking it, according to market sources. However, the situation might reverse again as the road repair and construction season ends with the advent of cold temperatures, and refineries increase fuel oil production.

The situation appeared to improve in May as the bitumen production season started, helping to reduce the residual fuel oil yield, according to a recent report by S&P Global.

However S&P Global analysts expect the "next hit" to come when 700,000 b/d of diesel that typically flows to Europe will have to be rerouted.

The EU ban on Russian oil imports takes effect in early 2023.

In other news, crude throughput at Socar's Heydar Aliyev refinery totaled 1.152 million mt in the second quarter, down 27.2% on Q1 and down 36.5% on Q2 2021, the Azerbaijani state-owned company said in a statement July 21.

The company said that exports of petroleum products, petrochemicals and gas chemical products during Q2 totaled 0.403 million mt, down 28.2% on Q1 and down 46.7% from the same period in 2021.

Separately, Uzbekistan's Fergana refinery said that lower gasoline production in June was due to works. The reformer unit L35/11-100 was halted for maintenance between June 1-15. The unit's capacity is 20,000-20,600/mt per month. In June the refinery produced 9.9 million mt, but its gasoline production amounted to 95,400 mt between January-June.

Many of the units need upgrading and the refinery's new owner SEG is planning investments of up to $400 million for its upgrade.

NEW AND ONGOING MAINTENANCE

UPGRADES

LAUNCHES

Near-term maintenance

New and revised entries

** Maintenance at Kazakhstan's Pavlodar refinery in July is resulting in some jet fuel shortages, according to media reports. Kazakhstan's government was also looking at the possibility for the maintenance at Pavlodar to take place from end-June till mid-July, after the end of the sowing season in the country.

** Russia's Astrakhan refinery, which predominantly processes gas condensate and produces only light products, has delayed its restart from maintenance, but is due to restart in early August, according to market sources. The plant was previously expected back around mid-June after starting seasonal maintenance early May.

** Russia's Surgut gas processing plant, which started works in early July, is due back in the last week of July.

** Russia's Antipinsky refinery, which has been undergoing maintenance since early June, has mostly restarted in the beginning of July. The works have been used to repair the delayed coker which has been offline since a fire in early January. The coker is due to restart at the end of August.

** Russia's Komsomolsk refinery was back in early July, after carrying out works in May and June.

** Russia's Kuybishev refinery is to carry out works throughout July. It was previously expected to have maintenance in May.

Existing entries

** Russia's Kirishi is expected to carry out partial works this summer. It carried out some partial works in May but has deferred most of its planned works.

** Production units and storage tanks at Ukraine's largest oil refinery, UkrTatNafta, have been destroyed by missiles, Russia's defense ministry said June 18.

At least six cruise missiles hit the facility, which was out of operation due to previous strikes, Dmytro Lunin, the head of the Poltava regional military administration, said. The latest strike was the fourth since early April. The Kremenchuk refinery stopped operations after being damaged in an attack April 2.

Since then, its fuel-producing parts have been targeted on several occasions by Russia. The new strikes make it highly unlikely that Ukraine will be able to repair the facility by the end of the year.

** Belarus' two refineries -- Mozyr and Naftan -- have been forced to reduce throughput due to sanction 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 used to export products to Ukraine, but Ukraine halted these after Russia's invasion.

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

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

Upgrades

Existing entries

** Uzbekistan's SEG said it plans to modernize Fergana and upgrade it into a petrochemical complex. "By September 2023, the plant will produce Euro-5 gasoline and various modern types of oils and other refined products," Shokir Fayzullaev, chief executive officer of SEG, said. SEG took charge of Fergana in 2020 under a trust management and has invested $58 million in various projects, including replacement of the hydrodesulfurization unit, and commencing construction of a new unit, start of Euro 4 and Euro 5 diesel production.

** Russia's Gazprom Neft signed an agreement with Neftekhimproekt for the construction of a deep processing complex at the Moscow refinery. Neftekhimproekt will prepare the engineering work and documentation for the new complex. The complex, which includes delayed coker, hydrogen and hydrocracker units, is 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.

** Belarus' Naftan 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/year 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 significant progress was reported in 2021.

** Russian oil company Lukoil said that its Norsi refinery is in the process of completing construction of the deep processing complex, which includes a delayed coker. The new complex will allow the refinery to reduce 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 is currently 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 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 has reorganized two of its refineries by merging the Krasnodar refinery to the Afipsky refinery in southern Russia, which retain the name Afipsky refinery. The Krasnodar refinery will specialize in primary processing and the Afipsky refinery in secondary processing.

** The hydrocracker at Ufaneftekhim, which has been offline due to a fire since 2016, is expected to be 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 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.

** 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 plans to 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/year of 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 plans 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.

** 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 Gazprom mulls the possibility of building a refinery in Russia's Far East, on the island of Sakhalin, according to media reports.

The company is expected to prepare an investment decision in 2023, according to the local government. The new refinery, with 4.5 million mt capacity, is likely to process gas condensate and produce gasoline, diesel and kerosene.

** 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/year capacity. Production will include 1.8 million mt/year gasoline, 6.3 million mt/year diesel and 4.5 million mt/year of petrochemical products.

** 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.