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March 29, 2017

Volume 17 Issue 52

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Slavneft to Stream Group III in April

Russian oil major Slavneft, a 50-50 joint venture of Rosneft and Gazprom Neft, is set to stream its first batches of Group III base oil at its Yaroslavl refinery in April, industry sources said last week.

The 100,000 metric tons per year Group III base oil plant was previously expected to begin production by the end of 2016 at the latest. In March 2016, the operator cited technical reconfiguration of the project as a reason for the delay, and the start date was pushed back to the first quarter of 2017.

Gazprom Neft’s spokesperson said it is still too early to confirm the base oil plant production launch, but some people with knowledge on the matter say it is highly likely that Slavneft will start its first trial batches in the weeks ahead, and will be ready to sell Group III base oil in late June.

“Gazprom Neft sources confirmed that the base oil plant in Yaroslavl, located 260 kilometers north of Moscow, will be ready to stream in April,” said DYM Resources, a slack wax, petroleum coke and base oil trader based in Berlin, on its web-site last week.

The prospect for this is high according to Denis Varaksin, DYM’s manager who covers Russia, Central Asia and the Middle East. Varaksin believes now is the best time to bring new Group III base oil capacity and supply into Europe, especially due to the Yaroslavl refinery’s proximity to the Baltic ports and European markets. “The Group III demand has been very good even for products with no approvals. This fact ensures quick sale [of Slavneft’s new Group III base oil products],” he told a reporter.

The Yaroslavl refinery currently has a 250,000 t/y Group I base oil plant.

“The launch of the new unit can either be a smooth or bumpy one. We have to wait and see [what] happens in April,” said Oleg Tsvetkov, head of the lubricants department at VNIINP, the Moscow-based All Russia Research Institute for Oil Refining.

Slafneft refinery in Yaroslavl

Photo courtesy Slavneft

Slavneft, a 50-50 joint venture of Rosneft and Gazprom Neft, is expected to stream its first batches of Group III base oil at its Yaroslavl, Russia refinery in April, industry sources said last week.

The Yaroslavl Group III base oil plant will produce four viscosity grades: 2, 4, 6 and 8 centiStokes. “This will be a step further compared to the Taneco base oil plant that produces only 4 cSt Group III and 2.5 cSt Group II base oil grades,” added Tsvetkov.

Russia has two existing domestic Group III base oil producers. The largest is Taneco, a subsidiary of Tatneft, which operates a 90,000 t/y Group II and 100,000 t/y Group III plant in Nizhnekamsk. Lukoil’s plant in Volgograd has capacity to make 30,000 t/y of Group III, along with 520,000 t/y of Group I. Oil major Naftan operates a much smaller Group III base oil plant in Belarus with 6,000 mt/y of Group III capacity, along with 198,000 t/y of Group I.