One of the two catalytic cracking units, key to the production of high-octane gasoline, was stopped on January 4: the equipment could not be repaired quickly because of sanctions.
One of Russia’s largest oil refineries, LukOil, Nizhegorodnefteorgsintez, was forced to cut fuel production by about half due to the failure of imported equipment, which could not be quickly replaced due to sanctions. The Russian publication Kommersant writes about this in connection with its own sources.
It was reported that one of the two catalytic cracking units, key to the production of high-octane gasoline, was shut down on January 4.
The company called the accident a “process plant incident.” The interlocutors of the publication say that LukOil expects to complete the repair of the equipment in the spring.
It was noted that the Nizhny Novgorod Refinery has two catalytic cracking units, which were commissioned in 2010 and 2015, respectively. The previous installation failed. Another broke down at the end of December last year, but they were able to restart it at lower power.
It was also reported that the accident at the Nizhny Novgorod refinery was the first known case when a lack of equipment due to sanctions could lead to the loss of production of a significant amount of high-octane fuel.
This refinery is important for supplying the capital region, which consumes about 30% of fuel in Russia. In particular, fuel is supplied to Moscow from the Nizhny Novgorod refinery through a specially developed pipeline. By the end of 2022, the Nizhny Novgorod Refinery will have processed about 15 million tons of oil – about 5% of the total refining in Russia.
Sources of the publication added that LukOil suspended the sale of AI-95 on the Russian stock exchange on January 10, and its price increased.
The Russian publication Interfax, citing its own sources, reports that the Russian government is considering the possibility of introducing a ban on fuel exports after the closure of one of the units at the LukOil refinery .
It was also noted that the Russian Ministry of Energy emphasized that the needs of the domestic market will be satisfied by reducing supplies in the direction of export and reorienting the existing resources of other participants in market.
Interfax sources reported that LukOil asked the Ministry of Energy to adjust the company’s production schedule for petroleum products, as well as the volume of exchange sales, and that LukOil itself has stopped exporting fuel to direct volumes to the domestic market.
Agency interlocutors say the option of a temporary ban on fuel exports is being discussed again.
Earlier, the media reported that the United States had begun urgent negotiations on Russian assets. In particular, the Joe Biden administration is pressing Britain, France, Germany, Italy, Canada and Japan to prepare a strategy for using frozen money for the second year of Russia’s invasion of Ukraine.
Source: korrespondent
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