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Diesel flows abroad

Date of publication: 21 December 2017 Printable version

Export of light petroleum products will grow.

Expansion of the export of domestic petroleum products in many respects depends on ramping up refining capacities and capabilities of the transport infrastructure to digest them. Development of the petroleum products pipeline system makes these capabilities rather promising.

Transneft has completed the filling of the Yug petroleum products pipeline with diesel fuel at the beginning of December of this year. Here, it is planned to transfer up to 300 thousand tons of Euro 5 diesel fuel produced by LUKOIL-Volgogradneftepererabotka towards the Port of Novorossiysk within the comprehensive testing before the end of the year.

The Yug project is being implemented in two main stages. These are the construction of a section from Volgograd to Novorossiysk with the construction completion in the 4th quarter of 2017 and the construction of a section from the Samara Region directly to Volgograd with the commencement of operation in 2020. Stage 2 provides for the commissioning of a rail tank cars loading facility at the Tinguta pipe-end pump station at the end 2018. The Volgograd – Novorossiysk section will transfer 6 million tons of diesel fuel per annum from 2018 and given the scheduled commissioning of the Samara – Volgograd section, the capacity of the Yug petroleum products pipeline will grow to 11 million tons per annum. Development of the pipeline system will enable the export of Russian light petroleum products from the Black Sea coast of the Russia Federation to European countries.

According to Vladimir Nazarov, Deputy Vice President – Director of the Petroleum Products Transportation, Metering and Quality Department of Transneft, transhipment of petroleum products would be carried out at the berths of the Sheskharis Oil Depot. The geography of deliveries will include the traditional European consumers of this region – Italy and Greece. The company is planning to increase the volume of transportation of light petroleum products via the trunk petroleum products pipeline system to 50 million tons per annum by 2021. Over 160 billion roubles of investments will be required for this purpose.

A little bit earlier, diesel fuel started to be supplied to the Gorky – Yaroslavl section of the Sever petroleum products pipeline (Vtorovo – Yaroslavl – Kirishi – Primorsk). Transneft is implementing this project to increase the export of Euro 5 diesel via the Port of Primorsk from the initial 8.5 million tons to 25 million tons per annum. Oil pipelines were repurposed for the transportation of light petroleum products within the framework of the project. In general, this allowed a substantial optimization of expenditures for the development and revamping of the trunk petroleum products pipeline system.

Main goals of investment projects for the development of the export trunk petroleum products pipeline system have been dictated by the need to enable export deliveries of petroleum products, including the redirection and transhipment of petroleum products from foreign ports to the ports of Russia in line with the respective instructions of the President and the Government of the country. In recent years, Russia is making determined efforts to redirect the cargo flows from the Baltic ports of Ventspilsa and Riga to the Russian ports in the Baltic Sea – Ust Luga and Primorsk. One of the results of the efforts to attract additional volumes of petroleum products to the Russian ports was that the new capacities offered by the Russian companies became attractive for the nearest neighbours as wells.

According to Igor Lyashenko, Chairman of the Belorusian State Concern for Oil and Chemistry (Belneftekhim Concern), Belarus would be able to start the export via Russian ports, particularly via Ust Luga, up to 1 million tons of petroleum products in 2018 already given the favourable economic conditions. According to Viktor Olersky, Head of Federal Marine and River Transport Agency, the availability of firm volumes from the Belarusian side is an important requirement here since the stevedores need to adhere to their schedules based on the loading levels of terminals. In general, further implementation of plans to develop the Russian trunk petroleum products pipeline system will depend on the market conditions and decisions on the construction of particular projects will be made depending on the availability of resources and opportunities to implement these plans.

Meanwhile, the capacities of the already built pipeline systems Yug and Sever are enough to cover both the domestic demand and the demand of foreign consumers for the next few years.

DYNAMICS OF EURO 5 DIESEL PRODUCTION IN RUSSIA, MT

Source: Ministry of Energy

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