Skip to main content

Refinery spending in the Former Soviet Union

Hydrocarbon Engineering,


New GlobalData research has indicated that the FSU is to spend approximately US$ 9.8 billion on new refining capacity between 2014 and 2020. This is forecast to add in excess of 400 000 bpd of refining capacity in the region. A new report from GlobalData which looks at this spending says that the FSU’s additional capacity will most likely result primarily from the construction of new refineries in Russia and Turkmenistan, along with an expansion project in Kazakhstan.Focus on Russia

Carmine Rositano, Managing Analyst, Downstream Oil and Gas, GlobalData, said, ‘Russia’s refining projects will be geared towards upgrading its existing facilities and meeting lower sulfur specifications mandated for domestic use, rather than increasing its capacity.’

Rositano stated, ‘Russia’s refining sector manufacturers a significant amount of heavy fuel oil, having exported around 1.6 million bpd in 2013. Demand for this product is expected to decline steadily, due to regulations calling for lower sulfur levels in fuel oil used by tankers on international waters. As a result, Russia’s tax and export duty regulations have been adjusted to provide incentives for refiners looking to build upgrade units to manufacture cleaner, low sulfur products and reduce their fuel oil output.’

The report from GlobalData has also shown that in addition to Russia’s forthcoming refinery construction plans, the FSU is looking at an expansion project in Estonia and at the Pavlodar refinery, Kazakhstan which is expected to contribute US$ 1 billion to Kazakhstan’s spending over the forecast period.

Rostiano continued, ‘Russia is likely to construct upgrade units at its existing refineries to crack fuel oil into gasoline and ultra low sulfur diesel, aimed at both the domestic market and for exporting to Europe. Additional lower priced diesel imports entering Europe from FSU and US projects, alongside new refining capacity in the Middle East, could force a number of Europe’s smaller facilities to close over the next few years.’


Based on a press release from GlobalData.

Adapted by Claira Lloyd

Read the article online at: https://www.hydrocarbonengineering.com/gas-processing/06082014/globaldata-fsu-refinery-spend/


 

Embed article link: (copy the HTML code below):