Refinery news roundup: Russian runs supported by stronger fuel oil

London — Russian refineries are likely to run at normal rates in December as stronger fuel oil export markets lend support to their economics.

As a result, expected run cuts are not likely to materialize.

Firmer international naphtha markets are also expected to result in higher output of naphtha rather than finished grade gasoline, as domestic gasoline demand seasonally weakens.

Separately, Russia's Gazprom Neft said that throughput at its own refineries and in those where it owns a stake was down 2.9% in January-September at 30.17 million mt. However in Q3, its throughput was up 16% on Q2 at 10.67 million mt as demand recovered and as maintenance was completed at the Yaroslavl refinery, in which the company has a share.

During January-September, Gazprom Neft sold 17.1 million mt of oil products, 15% down on the year. Sales rose 19% in Q3 on the quarter at 6.22 million mt as lockdowns were eased. During Q3, its sales of gasoline were 24% higher, jet fuel sales rose by 39% and sales of premium bitumen products by 21%.

In other news, crude deliveries to the Mariisky plant in Russia have been halted as of late Nov. 23, according to data from crude pipeline operator Transneft.

Meanwhile, loading terminals at the Russian Black Sea port of Novorossiisk will be adapted to handle bitumen and biofuel, according to Russian media reports.

The terminals are currently undergoing reconstruction work with a view to future requirements, Maksim Murashko, general director of Novorossiisk Fuel Oil Terminal (NMT) and oil product storage and transshipment company IPP said, in comments carried by the Russian press. Future avenues for development are transshipment of bitumen, biofuel and lubricants, he added.

Russian production of biofuels is understood to be minimal. However, there is significant potential for growth. Bioethanol production can create 10 million-15 million mt of additional demand for grain in the Russian Federation and 9 million-10 million mt of sugar beet, according to 2019 data from the Plekhanov Russian University of Economics published by the Russian National Biofuel Association.

Russia hopes to export hydrogen to Germany as part of a joint pilot project that the countries have been working on, deputy prime minister Alexander Novak said Dec. 1.

Russia wants to become a leader in the hydrogen market and expects to be able to export 2 million mt/year by 2035, according to deputy energy minister Pavel Sorokin, local media reported.

Sorokin said that was a conservative scenario given Russia has a bigger potential because it possesses "enormous supplies of natural gas for the production of hydrogen" and is strategically situated between two key markets -- Asia and Europe.

NEW AND ONGOING MAINTENANCE, UPGRADES, LAUNCHES

UPGRADES

LAUNCHES

Near-term maintenance

Existing entries

** Russia's Ryazan has reduced throughput due to maintenance on some units, according to local media reports.

** Russia's Orsk refinery plans to carry out the first maintenance on its hydrocracker in 2021. This year it planned works on 11 units, including a CDU-VDU complex, bitumen unit, the catalytic reformer L 35 11/300. Currently it is upgrading one of its primary processing units ELOU-AT 5, which will increase its efficiency. Next year similar works are planned for another primary processing unit ELOU-AVT 3. In addition, the refinery is carrying out works on the steam boiler equipment due to be completed by Dec. 1.

Upgrades

New and revised entries

** Russia's Rosneft, is working towards launching the hydrocrackers that it has built at four of its refineries -- Achinsk, Komsomolsk, Novokuybishev and Tuapse, Russian news agency Interfax reported. Russia's largest refiner is also completing the reconstruction of the hydrocracker at Ufaneftekhim, which was damaged in a fire in July 2016. State-controlled Rosneft is also building a new delayed coker at Achinsk and expanding the capacity of its existing delayed coker at Novokuybishev. 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.

** Russia's Komsomolsk refinery is planning an upgrade on its primary distillation complex CDU-VDU 3 after completing an upgrade on the other primary distillation complex CDU-VDU 2. The CDU-VDU 2 upgrade will enable the refinery to increase the yield of light products and low-sulfur marine fuel. Separately, the refinery is working on a hydrocracking and hydrotreatment complex which will enable it to increase the output of Euro 5 diesel. The complex has 3.5 million mt/year capacity and once it is launched the refinery's depth of processing will increase to 92%.

Existing entries

** 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, according to the energy ministry. Currently modernization is ongoing at a number of units at the refinery, S&P Global has reported previously. 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. Uzbekneftegaz along with Ernst & Young is realizing a project to increase efficiency at its production assets including at the refineries at Bukhara and Chinaz. 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 hydrotreating, RFCC, SelectFining and Merox units. The existing diesel hydrotreater will be revamped.

** 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%. 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.

** The delayed coker at Belarus Naftan is due for completion in 2021. Previously the complex was expected to come online this year. The new complex will enable the refinery to increase its depth of processing to 90% and the light products yield to 65% while decreasing the output of fuel oil. Belarus' Mozyr refinery is preparing for the launch of its new H-Oil hydrocracker. 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 complex, with feedstock capacity of 3 million mt/year, will increase the light products yield to 70% and the depth of processing to 90%.

** Russia's Norsi refinery continues work on a residue processing complex. Work on the complex, which includes delayed coker, diesel hydrotreater, gas fractionation, hydrogen and sulfur units, started in 2018. It has 2.1 million mt/year feedstock capacity. The complex will lead to substantial reduction of fuel oil output and will increase the depth of processing to 95.5%. S&P Global Platts has reported previously that the launch was due for 2021.

** Gazprom Neft said it has started assembly of electricity equipment at the catalytic cracker at its Omsk refinery as part of the unit's upgrade which aims at increasing the output of high octane components. The company previously said that 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. The refinery recently completed the installation of the main equipment of the diesel hydrotreater and dewaxer unit, currently under construction. The unit will have 2.5 million mt/year of feedstock capacity and will enable the refinery to replace two outdated units. It will be completed in 2021. Gazprom Neft had also 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 and 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 are set to be completed in 2021. 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 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.

** Kyrgyzneftegaz plans to upgrade its Jalal-Abad refinery. The company has issued a tender for development of feasibility study. Its strategy involves a unit for secondary processing of fuel oil.

** Russia's Perm is working on a deep processing complex which will increase the refinery's depth of processing. The project's timeline is 2020-2025. The complex includes a catalytic cracker, diesel hydrotreater, hydrogen unit, alkylation unit.

** Russia's Salavat refinery has launched a hydrogen unit. The hydrogen will be used in the gasoline hydrotreater unit, part of the new FCC complex under construction. Russia's Salavat is due to launch a new new FCC in 2020. The FCC will have feedstock capacity of 1.095 million mt/year.

** Russia's Ryazan has started reconstruction of its primary processing unit AVT-2. The upgrade of the 2 million mt/year CDU will enable the refinery to reduce the output of high sulfur fuel oil and improve the refinery's economics.

** 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.

** 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.

** 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. 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.

** 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, 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. Deliveries to Afispky will start after completion of upgrades, scheduled for the fourth quarter of 2020.

** 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.

** 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.

Launches

Existing entries

** Rosneft has shelved a plan to build a new refinery and petrochemical complex in the Far East due to changes in taxation, but can resume the project provided profitability can be guaranteed.

** 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.