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December 28, 2016

Volume 17 Issue 52

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Russian Base Oil Refiners Push to Modernize

MOSCOW – Russian base oil producers are aiming to add around 1 million metric tons per year of API Group II and III capacity by 2020, according to VNIPIneft, a Moscow-based research and design institute in the refining industry.

During the next five years, three refiners – Rosneft, Gazprom Neft and Slavneft (the latter is a 50-50 joint venture of the first two) – will be ready to stream high quality base oils. “Rosneft and Gazprom Neft are planning to expand their total quantities and rationalize its Group I base oil production,” Vladimir Kapustin, head of VNIPIneft, told RPI’s Lubricants Russia conference held here in November. “Others, such as Tatneft and Slavneft have finished their base oil production modernization or are about the finish in 2017.”

Since the mid-2000s, every base oil expansion or upgrade announced in Russia has suffered significant delays and postponements. Lukoil still has plans to upgrade its plant in Volgograd, but the timeline has been pushed from the mid-2010s to the mid-2020s. 

At the moment Russia has the capacity to make 2.2 million t/y of Group I base oil, but this number will be scaled down to around 1.6 million t/y by 2020. Lukoil and Rosneft are the two largest base oil producers, with capacity of 1,040,000 t/y and 450,000 t/y, respectively, while Slavneft, Gazprom Neft and Bashneft operate plants of 250,000 t/y, 240,000 t/y and 220,000 t/y, respectively.

Only two plants are now capable of making Group II or III stocks. Tatneft has a plant in Niznekamsk with capacity to make 90,000 t/y of Group II and 100,000 t/y of Group III, while Lukoil’s Volgograd plant can make 30,000 t/y of Group III, along with 520,000 t/y of Group I.

After the bumpy three years of economic slowdown caused by international sanctions and low crude oil prices, the future seems uncertain, and only Rosneft and Gazprom Neft seem confident about proceeding with base oil projects, according to VNIPIneft.

In Dec 2014, Tatarstan, Russia-based Tatneft started Group II/III base oil production at its Nizhnekamsk refinery, making it the first Russian oil major with large-scale, high quality base oil capacity.

Planned projects

Rosneft’s plant in Novokuibyshevsk stands to become the nation’s largest Group II producer upon completion of a project now underway at that Samarra Oblast facility. Detailed engineering and procurement of the main equipment has been completed, according to VNIPIneft. “The construction and installations are in progress, and the plant is scheduled to stream in 2018,” Kapustin said.

The Novokuibyshevsk plant will use solvent extraction and hydro-catalytic technology licensed from ExxonMobil Research and Engineering, along with wax isomerization and hydro-treatment technology from Chevron Lummus. The project will upgrade all of the facility’s 400,000 t/y capacity from Group I to Group II.

Rosneft is also planning a second upgrade for its Angarsk plant, which currently has capacity to make 300,000 t/y of Group I. Scheduled to be completed by 2019 or 2020, that project will install hydroisomerization and hydrofinishing technology licensed from ExxonMobil. Afterward, it should have to make 66,000 t/y of Group I, 128,000 t/y of Group II and 86,000 t/y of Group III.

Gazprom Neft's refinery in Omsk, Russia.

Photo: Gazprom Neft

The base oil plant at Gazprom Neft's refinery in Omsk, Russia, is slated to produce API Group II and III base stocks by the early 2020s.

Gazprom Neft has a longer timeline for a project at its Omsk plant. It is designed to add 150,000 t/y of Group II capacity and 75,000 t/y of Group III, and it could also increase Group I capacity from the current 240,000 t/y to 280,000 t/y. “The modernization is planned to be ready in the early 2020s, and it will employ hydrodewaxing and hydrofinishing technologies,” Kapustin said.

Slavneft, a joint venture between Gazprom Neft and Rosneft, is set to begin streaming Group III base oils in the second half of 2017, according to the institute. The plant will use hydrodewaxing and hydrofinishing of hydrocracked fuel residue. “The basic design, authority and engineering has been completed. The major equipment has been ordered, and the plant is expected to go onstream in the summer of 2017,” Kapustin said. The project will leave the Slavneft plant with capacity to make 100,000 t/y of Group III base oils only.