Oil refinery recycles fire

The fire at one of Russia’s largest LUKOIL refineries in Kstovo, apparently, was not as serious as the market had assumed. The company expects to launch the delayed coking complex, which allows increasing the depth of oil refining at the refinery, before the end of February. As a result, the plant can zero out the production of fuel oil and increase the production of diesel fuel.

LUKOIL expects to resume operation of the delayed coking unit (DCU) at the Nizhny Novgorod refinery in Kstovo by the end of February, which caught fire on February 7. According to the company, it has already begun preparations for the launch of the complex with a capacity of 2.1 million tons. At the same time, the enterprise continues to operate as usual, maintaining the planned indicators for the processing of crude oil and the shipment of marketable products (41.5 thousand tons per day), LUKOIL noted.

Kommersant’s interlocutors in the industry note that, based on the company’s statement, the consequences of the fire turned out to be insignificant.

For example, we can talk about the relocation of power cables or the replacement of small pieces of equipment. This, indeed, may take only a few days, provided that the elements necessary for repair are available or they can be bought without pre-ordering and manufacturing, notes one of Kommersant’s interlocutors on the market.

The Oil Residue Processing Complex was officially launched quite recently, in November 2022. Its main task is to increase the depth of processing and reduce the production of dark oil products, in particular fuel oil. The launch of the DCU allowed the plant in Kstovo to increase the yield of light oil products to 71% and increase the refining depth to 87%, while the volume of diesel fuel production increased by 0.7 million tons per year, and the output of fuel oil should have decreased by more than 2.5 million tons.

A significant problem for LUKOIL would be significant damage to the key technological part of the complex – columns or damage to iron structures. In this case, judging by the experience of similar accidents at the ultrasonic testing facility of the Antipinsky Oil Refinery and the Belarusian Naftan, repairs could take up to a year.

But, apparently, the fire did not cause serious damage, although some market participants note that “first you need to see how the installation will be launched,” since new problems may be revealed during the launch process.

According to Alexander Gadetskiy, founder of Engineering & Consulting PFA Alexander Gadetskiy, the delayed coking unit processes tars to produce gasoline and diesel fuel, which are then sent for hydrotreatment. The main product of DCU is petroleum coke, which is consumed by steel companies. If the delayed coking unit is excluded from the process, then heavy residues can also be processed at bitumen plants, which are also part of the Nizhny Novgorod plant, but there is not enough consumption for such an amount of bitumen, as well as at a hydrocracking unit, but this is three times more expensive than using Ultrasound, and much more difficult to operate, the expert says. In his opinion, in general, the construction of such complexes is a promising direction, in which LUKOIL took it very timely.

The accident at the plant did not affect the Russian fuel market in any way, although wholesale prices have started to rise in recent days. Kommersant’s interlocutors attribute the rise in prices to expectations of tax innovations, including a possible reduction in compensation to oil companies for supplying fuel to the domestic market. In addition, the export alternative for most products has grown due to the continued weakening of the ruble, and the EU embargo has not yet had a significant impact on the export of petroleum products from Russia. Gasoline AI-95 rose in price on the stock exchange on February 9 by 1.1%, to 38.95 thousand rubles. per ton, winter diesel fuel – by 3%, up to 44.2 thousand rubles. per ton, summer diesel fuel – by 2.4%, up to 43.1 thousand rubles.

Olga Mordyushenko