Russian refineries processed 19.96 million mt of crude, or 688,400 mt/day, over the May 1-29 period, up 9.3% from April, according to energy ministry data reported by Russia's Tass news agency.
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However, throughput over May 1-29 was lower than the 23.046 million mt Russian refineries processed in May 2021, according to S&P Global Commodity Insights data.
The higher rates compared with April were due to increased throughput at refineries owned by Gazprom Neft and Bashneft, as well as Taif, ForteInvest and smaller refineries.
The higher throughput came as refineries, including Bashneft's in the Ufa refinery hub, as well as Gazprom Neft's Moscow and Omsk completed maintenance, according to S&P Global data. In addition, Forte Invest's Orsk mostly completed its maintenance in April. Meanwhile, the Taif refinery, which halted processing in early April due to a lack of outlets for its naphtha output, resumed processing at the end of last month.
Smaller refineries benefited from higher demand for distillates for spring sowing works and increased runs to around 60%-70% in May, from 50% in April.
Russian refineries reduced processing in the wake of the invasion of Ukraine as international buyers avoided Russian-origin products and as domestic demand was hit by a surge in borrowing costs and an economic slowdown.
The run cuts were seen as having peaked in April, as domestic demand started rising in May ahead of the holiday season with fewer Russians expected to travel to foreign climes this summer.
Processing in June is expected to remain around May levels, according to market sources. Some of the medium-sized refineries in southern Russia are likely to run at around 90%, but those away from ports will keep runs around 70%. However, throughput prospects remain uncertain amid lower exports of Russian products and as the EU leaders agreed this week to halt flows of Russian oil products by the year-end.
Meanwhile, the Russian Duma's energy committee has proposed setting up a state reserves system to stockpile fuel oil for the country's power generation companies and to address the country's excess fuel oil production.
"Due to the introduction of sanctions, shipments of fuel oil by oil companies to consumers are significantly curtailed and there is an excess of this product in storages, which can be used for the work of power generation companies and guaranteeing the country's energy security," the committee said in a document on its website May 26.
In other news, Russia aims to speed up domestic production of catalysts as recent sanctions on refinery equipment threaten to bring its refining industry to a halt. By launching new catalyst factories, Russia may not only meet domestic demand but also start exporting the surplus, Tamara Kandelaki, Chairman of the Committee on Economics at the Oil Refiners and Petrochemical Association, told S&P Global.
Following Russia's invasion of Ukraine, both the US and EU announced sanctions that target the development and upkeep of Russian refineries, as well as their massive upgrade projects.
According to data from the Institute of National Energy, cited by Interfax, Russia's annual catalyst consumption totals around 20,000 mt. Dependency on imports is around 70%-80% but could also run up to 100%. Around 18,000 mt of catalysts are used by hydrotreaters, hydrocrackers and FCC units. Majority of those catalysts have been supplied by Europe and the US, with only a small portion coming from India and China, according to Interfax.
In 2020, Russia imported catalysts worth $187 million, the Moscow-based consulting firm Rupec estimated, adding that the EU accounted for nearly half of that and the US about a third.
In 2018, Gazprom Neft started building its Omsk catalyst facility in order to produce catalysts for FCC, hydrodesulfurization and hydrocracker units. It aimed to produce 21,000 mt/year of catalysts which would fully meet the needs of Russian refineries, S&P Global reported previously. Of the total, 6,000 mt will be catalysts for hydroprocessing and 15,000 mt will be FCC catalysts. The facility was due to be launched in 2021, but that has been pushed back to 2023, according to Interfax. Meanwhile, Rosneft has launched the first Russian production of hydrocracking catalyst at the RN-Kat plant, the company said in a statement on its website on May 24. The new production will significantly reduce the Russian oil refining industry's dependence on foreign catalysts, which was estimated at 90%, Rosneft said.
Separately, Ukraine will increase imports of motor fuel from Poland after the two countries agreed to boost supplies to 120,000 mt from 60,000 mt, Ukraine's First Deputy Prime Minister Yulia Svyrydenko said. The government also plans to suspend regulations on the price of gasoline and diesel fuel, Svyrydenko said.
Ukraine is also expected to see an increase in fuel supply from other EU countries as it looks to ensure that its motorists are able to buy gasoline and diesel fuel, according to Svyrydenko.
NEW AND ONGOING MAINTENANCE
New and revised entries
** Works at Russia's Perm will be drawing to a close in June. The main part of the maintenance has been carried out in April and May, according to sources.
** Russia's Kirishi refinery, which has been carrying out some partial works in May, has deferred most of its planned works to June, according to traders.
** Uzbekistan's Bukhara is fully back after maintenance, the company said May 19. The refinery was partially halted between May 13-16 for planned works. The works involved the atmospheric distillation column and the catalytic reformer.
** Production units of Ukraine's largest oil refinery, UkrTatNafta, were destroyed May 12 by missiles, as were gasoline and diesel storage tanks, Russia's defense ministry said. The refinery stopped operations after being damaged in an attack April 2. On April 24, some of its fuel-producing parts were also destroyed. Kremenchuk was the only plant still operating in Ukraine and supplying the local market after the country's Shebelinka GPP refinery was taken offline Feb. 26 due to the threat of shelling following the Russian invasion.
** 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 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.
** 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.
** Maintenance operations for Socar's Heydar Aliyev refinery and the integrated Azerkimya petrochemical plant 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.
** Shebelinka GPP, Ukraine's second-largest producer of diesel and gasoline that operates under the Shebel brand name, suspended operations Feb. 26.
** Output and exports of some products have been affected by a 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 Yaroslavl started partial works in April.
** Maintenance at Kazakhstan's Shymkent could be deferred to November and possibly to 2023.
** The Kazakhstan government is looking at the possibility for carrying out maintenance at Pavlodar from late June until mid-July, after the end of sowing works.
** 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 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 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.
** Russia's Moscow refinery has started 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 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. 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.
New and revised 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.