the RUSSIA oil & gas competitive intelligence report - Report Buyer

Russia Oil and Gas Competitive Intelligence Report 2010
Oil & Gas Infrastructure
Oil Refineries
With a total processing capacity of 5.62mn b/d in 2009 according to the BP Statistical Review, Russia is
the world’s third largest refiner after the US and China. Although the vast majority of this capacity dates
from Soviet times, the country’s largest players such as Rosneft have invested in upgrading their facilities
to meet stringent fuels quality standards, allowing many companies to export refined products,
particularly diesel, to the EU. Russia has also followed suit in mandating cleaner fuels, introducing Euro-
4 standards at the start of 2010 and preparing for the introduction of Euro-5 standards at the start of 2014.
Refineries in Russia are mostly located west of the Urals, although significant capacity exists in Siberia –
particularly West Siberia – along major pipelines. The country’s major refining centre is in the Volga-
Urals regions around the Republics of Tatarstan and Bashkiria. Large refining cities include Ufa, the
capital of Bashkiria, Samara and, further to the west, Yaroslavl.
Rosneft is the largest player in the Russian refining sector, with seven major refineries, a total capacity of
1.13mn b/d and a market share of nearly 21%. Other major companies involved in refining include
Gazprom Neft with 964,000b/d (18%), Lukoil with 894,000b/d (16%) and TNK-BP with 560,000b/d
(10%). There are also several slightly smaller refiners such as Surgutneftegaz, Bashneftekhim and
Tatneft, as well as a small number of companies operating individual plants. Almost all refiners in Russia
also control upstream assets, allowing companies to supply their own refineries through Transneft’s
pipeline systems. The few companies that do not have upstream involvement generally operate plants of
less than 50,000b/d, a category that together accounts for around 115,000b/d of Russian capacity.
Ryazan Refinery: TNK-BP’s Ryazan facility is the company’s largest and most up-to-date refinery, with
a nameplate capacity of 340,000b/d. As part of its wider downstream expansion plans, the company is
investing US$150mn in the construction of an isomerisation unit at the plant. Following the introduction
of tighter regulation regarding the lifecycle of road bitumen in 2010, TNK-BP looks likely to increase
investment at the plant, which can produce the company’s polymer-modified TNK Alfabit brand of
premium bitumen.
Komsomolsk Refinery: Rosneft’s Komsomolsk refinery in Russia’s Far East is supplied with crude oil
by rail from Western Siberia, over 2,000km away, as well as by pipeline from Sakhalin from Rosneft
subsidiary Sakhalinmorneftegaz. The motor and jet fuels produced by the refinery are currently exported
to Japan, South Korea and Vietnam via the Nakhodka tanker terminal and the Vanino tanker terminal.
Planned Additional Capacity: In June 2007, Rosneft CEO Sergei Bogdanchikov announced plans to
expand the company's refining capacity ninefold by 2015. Rosneft is currently upgrading its Tuapse and
Komsomolsk refineries and said in 2008 that it was looking into constructing a new 240,000b/d plant near
the port of Primorsk in Russia’s Far East, in partnership with Surgutneftegaz. Reports in October 2009
© Business Monitor International Ltd Page 67