REFINERY NEWS ROUNDUP: Russian refineries to raise runs in August

London — The Russian energy ministry has urged oil producers to send additional volumes to domestic refineries as output limitations under the OPEC+ deal ease starting August, deputy energy minister Pavel Sorokin said.

"As we expect production increase in August, we now recommend to send maximum possible volumes of this spike to Russian refineries," Sorokin said.

Additional loading of local refineries would allow increasing the output of gasoline in order to create inventories for the period of repair works, he added.

In the past months, exports of oil products, including diesel and gasoline, significantly dropped in order to prioritize the domestic market amid the coronavirus pandemic.

Russia also introduced a temporary ban on the import of oil products, including gasoline, diesel and jet fuel, until October 1 in order to protect the domestic market.

Starting August, Russia will be allowed to increase crude oil output by 400,000 b/d to about 9 million b/d under the OPEC+ deal.

Most of the increase will go to the domestic market and will not lead to a surge in exports, energy minister Alexander Novak said.

"We clearly see early recovery signs and we see moderate increase in the number of flights, sales of gasoline and diesel fuel. The lifting of restrictive measures leads to an increase in demand in the domestic market, which is also happening in the Russian market," Novak said.

The expected higher throughput in August follows a period of several months when Russian refineries have been keeping output low, partly on seasonal maintenance but also as crude availability has become tight as a result of cuts agreed by OPEC and its allies, according to trading sources.

Refinery throughput in May was around 21 million mt, down from 25 million mt in March, as a host of refiners started spring maintenance in April. However, although refineries gradually started up in June, throughput continued to fall and was around 20.5 million mt last month.

Product demand, especially for premium unleaded gasoline, recovered faster than expected, pushing prices to record highs.

Separately, Kazakhstan has banned imports of diesel, gasoline and jet fuel by pipeline, rail and road until Sept. 1 to ensure the country's energy security, the energy ministry said July 15. Typically Kazakhstan was importing oil products from Russia although those had declined or fully halted since it modernized its refineries.

Belarus' Naftan refinery will receive the second cargo of US crude in August, the country's Belta news agency reported, citing owner Belneftekhim. 80,000 mt of White Eagle Blend is currently loading at the port Beaumont, and will arrive at the Baltic Sea port of Klaipeda Aug 6-8, Belta reported.

In June, Naftan received US Bakken crude via rail from Klaipeda. The US exported its first crude oil cargo to Belarus in mid May after an agreement between the two governments in February to increase trade of American goods to the landlocked Eastern European country. Access to US crude is part of Belarus' strategy to diversify supply sources and ensure sustainable operations for its refining sector in 2020 and beyond, Belarus Foreign Minister Vladimir Makei said in a statement in May.

Russia's Kuybishev refinery is ready to start producing winter diesel using the process of catalytic dewaxing. The winter diesel will have cold properties of up to minus 38 degrees Celsius. The dewaxing process will allow the refinery to increase the output of winter diesel and its light products yield.

NEW AND ONGOING MAINTENANCE, UPGRADES, LAUNCHES

UPGRADES

LAUNCHES

Near-term maintenance

Existing entries

** The Surgut gas condensate processing plant was due to start works July 20 until early August as Astrakhan comes out of a turnaround.

** 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

Existing entries

** 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.

** Gazprom Neft said 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, among others. The hydrogen unit will be tested first, followed by the hydrocracker. Once the testing is completed, the complex could be launched in a 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 and lubricants feedstock. Construction is due for completion on 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 are set to be completed in 2021. Separately, Omsk it 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. In 2021, the refinery will complete the construction of a new diesel dewaxing and hydrotreating unit, with 2.5 million mt/year capacity, which will replace two outdated units. 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.

** 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 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.

** Ilsky refinery has five CDUs and is currently building another CDU, AT-6, with 3.6 million mt/year capacity, which will help increase its capacity to 6.6 million mt/year. It aims to launch the new unit in test mode around the end of 2020. Ilsky was planning a gasoline complex, including CCR unit, isomerization, gasoline hydrotreater, as well as distillate hydrotreater, hydrocracker and delayed coker.

** 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 Moscow refinery will complete its modernization by 2023-2024, when as part of a third phase it will halt the production of fuel oil and achieve 99% depth of processing. It aims to complete the second phase of modernization by 2021, launching the new Euro+ complex, the refinery's managing director Vitaliy Zuber said. It plans to complete the testing of the complex and take out of service the outdated units next year. Construction of the new complex, which includes hydro treating, catalytic cracking, a catalytic reformer and visbreaking units, started in 2016. It will enable the refinery to remove five outdated units from operation, built in the 1950s and 1960s. The Euro+ complex will increase the light products yield to 60% and enable the refinery to double its jet fuel output.

** 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.