REFINERY NEWS ROUNDUP: Russian refineries report lower Q2 throughput

London — Russian oil companies reported lower refinery throughput in Q2 due to reduced demand for oil products.

Motor fuel demand was severely affected by movement restrictions introduced in April to combat the spread of coronavirus, although demand rebounded in June and by July reached or even exceeded last year's levels.

Lukoil reported lower Q2 and H1 throughput at its refineries in Russia and Europe due to turnarounds as well as optimization against the backdrop of lower demand due to the COVID-19 pandemic.

Lukoil reported lower throughput at its Russian refineries, 6.9% down in H1, at 20.22 million mt. For Q2 it reported 9.283 million mt throughput, 15.1% down.

This was due to works and optimization at its Ukhta and Nizhny Novgorod refineries. Meanwhile its Perm and Volgograd refineries maintained throughput at the same level as in Q1, Lukoil said.

The Nizhny Novgorod (Norsi) refinery carried out works between March and May, whereas Ukhta carried out full works in May and June, said traders.

Rosneft said that its Russian refineries processed 21.5 million mt in Q2, or 17.2% down on the quarter and 6% down on the year. The lower throughput was due to optimization of processing due to low margins as well as reduced demand due to the COVID-19 pandemic. Over H1, throughput was stable on the year at 47.4 million mt. The company produced 20.9 million mt of oil products in Russia in Q2, 16.5% down on the quarter and 5.3% down on the year. Over the first six months it produced 46 million mt of products, 0.5% down on the year.

Its Q2 gasoline production at 2.66 million mt was 25.7% down on the quarter and 27.3% down on the year. Diesel, including marine gasoil, was 7.19 million mt in Q2, down 15.4% on the quarter and 3.6% on the year. Naphtha output was 1.44 million mt in Q2, 10.6% down on the quarter but 22% up on the year.

Fuel oil amounted to 5 million mt in Q2, 21.4% down on the quarter and 6.9% down on the year.

Meanwhile, nationwide protests in Belarus against results of the presidential vote have not affected facilities of state-owned Belneftekhim, which continued to work as normal, the company said.

Belneftekhim spokesman Alexander Tishchenko told S&P Global Platts Aug.14 that the refinery continues operating normally with no impact from the protests.

Tishchenko also told Interfax news agency that Naftan workers were holding peaceful protests but operations were not disrupted. "These enterprises are with a high level of danger and the workers are well aware of this, therefore technological process is not disrupted," Tishchenko said.

Clashes engulfed Minsk and several other cities on August 9 after long-standing leader Alexander Lukashenko won a presidential election for the sixth time.

Ukraine's diesel fuel prices are not likely to be affected by political turmoil in Belarus, one of its main suppliers, due to abundant stocks, Serhiy Kuyun, the head of the A-95 energy analysis firm, said Aug. 17.

Ukraine diversified suppliers of diesel fuel and gasoline earlier this year to avoid heavy reliance on any particular source, and the strategy has worked, Kuyun said.

However, supplies of bitumen in Ukraine may be at risk as Belarus delivers 50% of the commodity, while supplies from Russia are closed, he said.

Separately, a second US crude cargo started arriving at Belarus Naftan, Belta news agency reported Aug. 14. The 76,000 mt White Eagle Blend cargo arrived at the Baltic Sea port of Klaipeda Aug. 9. The cargo will be delivered to Naftan fully over the course of August. Naftan received one cargo of US crude -- 77,000 mt of Bakken -- mid-May after an agreement between the two governments in February to increase trade of US goods to the landlocked country.

Earlier this month, an oil tanker unloaded crude at Ukraine's Pivdenniy oil terminal near Odessa to be sent to Belarus via the Odessa-Brody oil pipeline. The tanker carried 85,000 mt of Azeri Light crude oil, Ukrtatnafta said.

Belta cited plant owner Belneftekhim as saying the oil was for the Mozyr refinery.

Most of Belarus's crude processing in August will take place at Mozyr as the Naftan refinery is starting planned work, Belta also said. Overall, the two refineries will process at least 16 million-16.5 million mt this year, Belta said.

Deliveries of Russian crude to Belarus have been disrupted since the start of 2020 due to a dispute over crude supply terms. However, shipments of Russian crude have increased in July.

NEW AND ONGOING MAINTENANCE, UPGRADES, LAUNCHES

UPGRADES

LAUNCHES

Near-term maintenance

New and revised entries

** An oil tanker thta arrived at Ukraine's Pivdenniy oil terminal with Azeri Light crude oil is for the Mozyr refinery, which has now completed planned maintenance work, according to media reports. Most of Belarus' crude processing in August will take place at Mozyr as the country's Naftan refinery is starting planned works, Belarus news agency Belta also said. Overall, the refineries need 1.37 million mt of crude in August, 1.21 million mt of which will be Russian crude, Belta said.

** Russia's Komsomolsk is set to carry out works on its primary processing ELOU-AVT-2 and the diesel hydrotreater, according to tender documents, Interfax reported.

** Russia's St. Petersburg exchange (Spimex) said that Rosneft's Angarsk is halting gasoline sales with effect from August 10 due to planned maintenance. Traders have previously said the refinery is set to carry out works in August.

Existing entries

** Russia's Taif is due to hold its planned maintenance in September, a source close to the refinery said. It is expected to be back in operation in October. The refinery typically undergoes maintenance each autumn.

** Russia's Perm is planning works in H2 2020, according to tender documents, including to a catcracker and hydrocracker. The refinery also carried out partial works in May-June.

** Russia's Orsk refinery plans works at 11 units in 2020, the refinery said. According to trading sources, works started in April. Its 2019 refinery maintenance schedule included works at seven units and was completed in November. The units that underwent maintenance included the CDU VDU ELOU-AVT-3, a visbreaker, isomerization, bitumen unit, as well as a reformer and diesel hydrotreater.

** Maintenance at Russia's Volgograd will be carried out in autumn, sources said.

Upgrades

New and revised entries

** Russia's Ryazan has started reconstruction of its primary processing unit AVT-2. The upgrade of the 2 million mt/yr CDU will enable the refinery to reduce the output of high sulfur fuel oil and improve the refinery's economics. In 2019, Ryazan completed a catalytic reformer upgrade by changing the reactors. Following the works, the unit will have maintenance once every three years. The refinery has also upgraded the control system of the diesel hydrotreater and has optimized the purification system of the FCC unit. As part of its modernization it has launched a new isomerization unit.

** Russia's Ilsky refinery, which is building a new 3.6 million mt/year CDU, has installed the columns at the unit, dubbed ELOU AT-6. The launch of the unit is aimed for the end of 2020. The refinery previously said it expects the new unit to help increase capacity to 6.6 million mt/year.

Existing entries

** Gazprom Neft said it had completed the installation of the main equipment of the diesel hydrotreater and dewaxer unit at its Omsk refinery, currently under construction. The unit will have 2.5 million mt/yr feedstock capacity and will enable the refinery to replace two outdated units. It will be completed in 2021. Gazprom Neft said previously it had started testing the equipment of the deep processing complex at Omsk, currently under construction. The testing includes pressurization of heat exchangers and pumps. The hydrogen unit will be tested first, followed by the hydrocracker. Once the testing is completed the complex could be launched in test mode. The 2 million mt/year complex will enable the refinery to increase the depth of processing and regulate the yields of gasoline, jet fuel, lubricants feedstock. Construction is due for completion in 2021. Omsk has also completed the installation of its new delayed coker. The 2 million mt/year unit will help halt fuel oil output, increase coke production and the depth of processing to 97% and light products yield to 80%. It will produce 38,700 mt/year of needle coke, which is used in the production of electrodes for the steel and aluminum industries. It is part of the deep processing complex at Omsk. The new delayed coker unit and upgrades to its existing coker were set to be completed in 2021. Separately, Omsk has completed the installation of the upgraded L 35/11-600 catalytic reformer. Two new compressors have been installed and three have been upgraded. Work is due for completion in 2020. Omsk has also completed the installation of the main equipment at the primary processing complex CDU-VDU. The complex, with 8.4 million mt/year capacity, will be completed in 2021, and 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. The project is due to be completed by the end of 2021.

** The Euro+ complex at Russia's Moscow refinery was officially launched July 23. Russia's Moscow refinery will complete its modernization by 2025, when as part of a third phase it will halt the production of fuel oil and achieve 99% depth of processing.

** Turkish construction group Tekfen has been awarded contracts worth around $237 million for the ongoing refurbishment and modernization of Socar's Heydar Aliyev refinery in Baku, the company said. The contracts were awarded by the refinery's main contractor Tecnicas Reunidas to Azfen, a 40% owned subsidiary of Tekfen Holding's main construction arm, Tekfen Insaat ve Tesisat A.S. A Socar official said June 8 that work on refurbishing the refinery had been affected by the coronavirus pandemic. Previously the target for production of the Euro 5 fuels had been the end of 2021, and prior to that the end of 2020 for Euro-5 diesel and early 2021 for Euro-5 standard A-92/95/98. Ongoing work on the refinery includes replacing all the units except one and in the process increasing the capacity to 7.5 million mt/year from 6 million mt/year. An official said it was unclear whether all work on the refinery will now be completed by 2024-25 as had previously been planned.

** Russian oil company Tatneft said it has completed the installation of a deisobutanizer at its Taneco refinery. The unit separates isobutane from normal butane with 350,000 mt/year feedstock capacity. The isobutane will be used as feedstock for the company's Tolyattikauchuk petrochemical plant for the production of synthetic rubber. Taneco aims to complete a 1.1 million mt/year FCC construction in 2020 as well as a 3.7 million mt/year distillates hydrotreater. In 2021, the company aims to complete construction of a second delayed coker with 2 million mt/year capacity. It has two operating CDUs with 15.3 million mt/year total capacity, a 2.9 million mt/year hydrocracker, 420,000 mt/year isomerization and 714,000 mt/year reformer units, a 2 million mt delayed coker as well as a 1.6 million mt/year diesel, 1.1 million mt/year naphtha and 0.5 million mt/year kerosene hydrotreaters. The refinery aims to process 11.456 million mt of crude oil and 719,800 mt other feedstock this year.

** Kazakhstan's Pavodar refinery is looking to build a unit for the purification of LPG and has selected a Merox technology. The refinery, which is processing mostly Western Siberian crude, said that recently the mercaptan sulfur content has increased and as the existing units cannot remove the mercaptans, this deteriorates the LPG's quality.

** Belarus's Mozyr refinery is preparing for the launch of its new H-Oil hydrocracker, according to the country's Belta news agency. The equipment for the main feedstock pumps has been installed. The complex includes hydrocracker, hydrogen and sulfur units. The completion of the hydrocracker H-Oil complex at Mozyr will cut fuel oil output and increase light products. The quality of the fuel oil output will improve to less than 1% sulfur. The complex, with feedstock capacity of 3 million mt/year, will increase the light products yield to 70% and the depth of processing to 90%. Belarus Naftan has started testing the new delayed coker, while construction works are ongoing. The coker is expected to be completed and fully launched this year.

** Uzbekneftegaz will proceed with an upgrade of its Bukhara and Fergan refineries and put on hold building a new refinery in the Jizzakh region, the company said earlier. The upgrade of Uzbekistan's Fergan refinery continues with a project for the construction of an isomerization unit, which will enable the refinery to produce Euro 4 and 5 gasoline. Uzbekneftegaz along with Ernst & Young is realizing a project for increasing efficiency at its production assets including at the refineries at Bukhara and Chinaz. The project includes increasing utilization rates, reducing maintenance costs and increasing the period between turnarounds.

** Russia's Salavat will launch its new FCC in 2020, it said in an in-house magazine. The FCC will have feedstock capacity of 1.095 million mt/year.

** The launch of four secondary units at the Mariisky refinery has been delayed, according to media reports. 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 modernization of Russia's Afipsky refinery has entered an active phase, the company said. It includes a hydrocracker, construction of which is under way. The complex, planned to process 2.5 million mt/year feedstock, is set for launch in the second half of 2022. In addition, the refinery plans to build a delayed coker.

** Russia's crude pipeline operator Transneft has started sending Urals crude to the Ilsky refinery via the newly completed pipeline. It previously said shipments to Ilsky would start in 2019 and to the Afipsky refinery in 2020, both in the Krasnodar region. The pipeline's capacity is 4.5 million mt/year and can potentially be expanded to 9 million mt/year. Deliveries to Afispky will start after completion of upgrades, scheduled for the fourth quarter of 2020. Of the pipeline's capacity, 3 million mt/year will be delivered to Afispky and 1.5 million mt to Ilsky. The trunk line can be connected to two main pipelines: Tikhoretsk-Novorossiisk-2 and -3 and thus can be connected to the Urals pipeline and to the pipeline delivering Siberian Light to Novorossiisk, increasing the flexibility of supplies.

** Russia's Orsk has started a second phase of modernization, a key of which will be a delayed coker complex. Its completion in 2023 will provide additional feedstock for the hydrocracker, which was brought online in 2018, as well as increasing the depth of processing to over 98% and the light products yield to 84%.

** The Yaisky refinery is working on a deep processing complex, which will enable it to produce gasoline. The complex includes a gasoline hydrotreater, isomerization and CCR unit. It will produce over 700,000 mt/year Euro 5 gasoline.

** Russia's Rosneft has reported progress on various upgrade projects. In Yaroslavl, owned by Rosneft and Gazprom Neft through Slavneft, a project has been approved for the construction of a deep processing complex. At the company's Achinsk refinery, works are under way for reconstruction of the gas fractionation column of a crude distillation unit, while at the Ufaneftekhim refinery, repairs continue at the hydrocracker following incidents. Russia's Bashneft, majority owned by Rosneft, issued a tender for the reconstruction of the hydrocracker at Ufaneftekhim in late 2019. The unit was damaged in a fire in July 2016.

** Russia's Novoshakhtinsky refinery, in the Rostov region, is starting work on a project aimed at starting production of Euro-5 gasoline, the regional governor said. Completion is targeted for 2027. The plant has a 5 million mt/year nameplate capacity and was launched in 2009.

** McDermott International said it has been awarded an engineering, procurement and construction contract by Lukoil for the delayed coker at the Nizhny Novgorod refinery in Russia. The delayed coker, which will process 2.1 million mt/year of residues, will be part of a deep processing complex, including a delayed coker, a diesel hydrotreater, gas fractionation, hydrogen and sulfur units. The complex has been scheduled for startup in 2021.

** 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.

** A delayed coker will be installed at the Turkmenbashi refining complex in Turkmenistan.

** Rosneft, Russia's largest crude producer, 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.

Launches

Existing entries

** A new refinery is planned to be launched in Georgia, at the Black Sea port of Kulevi, in 2024, according to media reports. Construction of the 4 million mt/year plant is due to start in 2021, according to Fazis Oil, the reports said. 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, according to reports. 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 for the second phase, which includes an FCC, hydrotreater and delayed coker.