The Future of Russian Refining and Exports of Oil Products

Russian refining has been growing steadily over the last several years. However, the outlook for the sector remains to be hard to define. Some of the key questions that industry players face today are the following:

• How will the Russian oil products mix develop in the coming years?
• What are the chances that Russian refiners will reduce throughput, given that they refine so much oil today?
• Will transportation infrastructure cope with the growth in export volumes?
• What are the opportunities and risks for me in the downstream sector?
• Will there be enough supply of gas oil?
• What is the outlook for procurement by Russian refiners?

 
The Future of Russian Refining and Exports of Oil Products provides thorough examination of the recent trends in Russian refining. From the basis of extensive downstream consulting and research experience RPI experts have processed a massive amount of industry data and interviews with industry players to come up with a study that goes deep into analysis of the sector’s historical development and offers an outlook for the development of Russian downstream and exports of oil products.

 
The Future of Russian Refining and Exports of Oil Products analyses:

•  key driving forces for production, consumption and exports of oil products from Russia, forecasts up to 2014
• key industry players; refining capacities; reconstruction and upgrade programs for Russian refineries
• economic efficiency of oil products domestic deliveries and their exports
• current status of Russian petroleum product supply markets
• existing petroleum products export infrastructure and its future development

 
The Future of Russian Refining and Exports of Oil Products discusses how Russian downstream industry will cope with growing demand in Europe for Russian diesel and falling demand for fuel oil globally, what will happen to refinery throughput and how crude oil export infrastructure will influence downstream industry development.

Chapter 1. Executive summary
1.1. Foreword
1.2. Executive summary

 
Chapter 2. Methodology

 
Chapter 3. Macroeconomic environment

 
Chapter 4. Overview of Russian refining industry
4.1. Refining capacities and oil products production
4.2. Gasoline production
4.3. Gas oil production
4.4. Heavy residue (fuel oil) production

 
Chapter 5. Refinery assets management in Russia

 
Chapter 6. Implementation of refineries development investment program

 
Chapter 7. Domestic demand for oil products
7.1. The Russian oil product market structure
7.2. Motor gasoline consumption
     7.2.1. Types and dynamics of consumption
     7.2.2. Segment consumption structure
     7.2.3. Regional consumption structure
     7.2.4. Domestic gasoline consumption forecast
7.3. Gas oil consumption
     7.3.1. Consumption dynamics
     7.3.2. Segment consumption structure
     7.3.3. Regional consumption structure
     7.3.4. Domestic consumption forecast
7.4. Russian fuel oil consumption
     7.4.1. Consumption dynamics
     7.4.2. Segment consumption structure
     7.4.3. Regional consumption structure
     7.4.4. Domestic consumption forecast

 
Chapter 8. Russian petroleum products export
8.1. Export dynamics of key oil products
     8.1.1. Gasoline export
     8.1.2. Gas oil export
     8.1.3. Fuel oil export

 
Chapter 9. Prospects of oil product export
9.1. Prospects for gasoline export
9.2. Prospects of gas oil export
9.3. Prospects of fuel oil export
9.4. Quality requirements to Russian petroleum products
     9.4.1. Gasoline
     9.4.2. Diesel
     9.4.3. Fuel oil

 
Chapter 10. Existing petroleum export infrastructure

Figure 1-1 Consumption and export of petroleum products
Figure 1-2 Key drivers impacting petroleum product export
Figure 1-3 Forecast of petroleum product export growth
Figure 3-1 Purchasing Power Parity and GDP growth in Russia
Figure 3-2 GDP PPP growth and estimated export revenues from crude oil
Figure 3-3 Year on growth of GDP PPP and crude oil exports
Figure 4-1 Dynamics of crude export and refining throughput in 1991-2003 (mln of tons)
Figure 4-2 a) Crude oil export and export pipelines capacity (includes pipeline deliveries to CIS),
mln tons, and b) gasoline consumption and export, thousand tons
Figure 4-8 Comparison of secondary process capacities as of 2002 (% of primary distillation)
Figure 4-9 Comparison of key oil product yield for 2002 (mln of tons and %)
Figure 4-11 Types of catalytic cracker capacity and capacity utilization in 2003
Figure 4-12 Average age of capacities in years
Figure 4-13 FCC capacities installation (thousands of tons)
Figure 4-14 Key product output and gas oil production growth (mln of tons and %)
Figure 4-15 Russian refineries' key products portfolio in % to key products output (weight based)
Figure 4-17 Light product yield in % to primary distillation
Figure 4-18 Gas oil-to-gasoline production ratio
Figure 4-19 Apparent available secondary capacities in the Russian refining industry in 2003
Figure 4-20 Apparent capacity utilization in the Russian refining industry
Figure 4-21 Secondary capacity utilization growth
Figure 4-22 Change in motor gasoline production structure (thous. tons)
Figure 4-25 Dynamics of gas oil production with 0.2% sulfur content (2000 ррm) (th. tons)
Figure 4-26 Production of winter gas oil and jet fuel and primary distillation volumes
Figure 4-28 Production of fuel oil in Russia, (thous. tons)
Figure 6-2 Capacities increase forecast for the period up to 2014
Figure 7-1 The structure of production and consumption of key refining products in 2004 (thousands of tons, %)
Figure 7-2 Key petroleum product consumption in 1998-2004 (thousands tons)
Figure 7-3 Domestic consumption of motor gasoline in Russia in 1998-2004 (thousands of tons)
Figure 7-4 Structure of motor gasoline consumption in Russia, 1998-2004
Figure 7-5 Growth of high octane gasoline consumption (left scale) and passenger car fleet (right scale) in Russia, 1998-2004
Figure 7-6 Domestic consumption of high octane motor gasoline in Russia, 1998-2004 (thousands of tons)
Figure 7-7 Domestic consumption of А76(80) motor gasoline in Russia, 1998-2004 (thousands of tons)
Figure 7-8 Dynamics of segment motor gasoline consumption in Russia 1998-2004
Figure 7-9 Structure of segment motor gasoline consumption in 1998-2003
Figure 7-10 Structure of motor gasoline consumption in okrugs of Russia, 1998-2003
Figure 7-11 Motor gasoline consumption in okrugs of Russia, 1998-2003 (thousands of tons)
Figure 7-14 Domestic gas oil consumption in Russia, 1998-2004 (thousands of tons)
Figure 7-15 Structure of Segment gas oil consumption in Russia, 1998-2003
Figure 7-16 Structure of gas oil consumption by okrugs of Russia in 1998-2003
Figure 7-17 Gas oil consumption in okrugs of Russia in 1998-2003 (thousands of tons)
Figure 7-20 Apparent domestic Russian fuel oil consumption in Russia, 1998-2004 (thousands of tons)
Figure 7-21 Price for BTU equivalent of various fuels
Figure 7-22 Structure of Segment Russian fuel oil consumption in Russia
Figure 7-23 Structure of Russian fuel oil consumption by okrugs of Russia in 1999-2002
Figure 7-24 Russian fuel oil consumption in okrugs of Russia in 1999-2002 (mln of tons)
Figure 8-1 Consumption of key petroleum products vs. export25, thous. tons 1998-2004
Figure 8-2 Dynamics of key oil product basket export from Russia in 1998-2004
Figure 8-3 Key oil product basket exports from Russia in 1998-2004 (thousands of tons)
Figure 8-4 Gasoline exports from Russia in 1998-2004 (thousands of tons)
Figure 8-5 Motor gasoline exports from Russia in 1998-2004 (thousands of tons)
Figure 8-6 Gas oil exports from Russia in 1998-2004 (thousands of tons)
Figure 9-1 Forecast of total oil product export (millions of tons)
Figure 9-2 Forecast of total oil product export, negative scenario - left hand, positive - right hand (millions of tons)
Figure 9-5 Forecast of gas oil exports by Russian refineries (millions of tons)
Figure 9-6 Forecast of gas oil exports by Russian refineries (millions of tons)
Figure 10-1 Tank car fleet ownership structure (% of total and active fleet)
Figure 10-3 Product pipeline operator profile
Figure 10-4 Product pipelines infrastructure in Russia and transit countries
Figure 10-9 Contribution of main goods transportation segments of the Russian Railways to earnings growth, 2001-2003
Figure 10-10 Growth of freight transportation tariffs and consumer prices, 2001-2004
Figure 10-11 Dynamics of tariffs on crude and oil products transportation, Russian Railways total and inflation in 2001-2003
Figure 10-12 Growth of gas oil/crude/oil product transportation tariffs and inflation in 2001-2003
Figure 10-14 Forecast of tariffs on crude and oil product transportation by railway in 2004-2014
Figure 11-1 Dynamics of Urals and key oil product prices on the Russian market (USD per ton, F.O.B. plant prices of Russian refineries')
Figure 11-3 Growth of A92 gasoline prices in Russian (USD) and contribution of key factors to selling prices growth from 2002 - first six months of 2004
Figure 11-4 Spread between Urals export price and key oil product prices on the Russian market (in USD per ton, F.O.B. refinery gate)
Figure 11-5 Dynamics of Brent and key oil product prices on export markets (USD per ton, average NWE & Med value)
Figure 11-6 Spread between Brent and prices for key oil products on the export (USD per ton, average NWE & Med value)
Figure 11-7 Comparison of CIF prices on export markets and F.O.B AI-95 gasoline prices at  refineries for, in USD per ton
Figure 11-9 Comparison of CIF prices on export markets and F.O.B. prices for Russian gas oil
(Russian gasoil) at refineries (USD per ton)
Figure 11-11 Comparison of CIF prices on export markets and F.O.B. fuel oil prices at refineries (USD per ton)
Figure 11-12 Export price dynamics in $ per ton
Figure 11-13 Fuel oil discount to Urals in $ and price of fuel oil as share in Urals price
Figure 11-14 Export and domestic prices for fuel oil
Figure 11-15 Refinery gate fuel oil price discount to export price
Figure 11-16 Forecast of crude prices (International Energy Outlook 2004: International Energy Agency)
Figure 11-17 Forecast of export Russian gas oil prices (USD per ton)
Figure 11-18 Forecast of export A95 gasoline prices (USD per ton)
Figure 11-19 Forecast of domestic wholesale prices for Russian gas oil (USD per ton)
Figure 11-20 Forecast of domestic A92 gasoline prices (USD per ton)
Figure 12-1 Forecast of crude production in Russia, 2004-2014 (optimistic scenario)
Figure 12-2 Forecast of crude production in Russia, 2004-2014 (conservative scenario)
Figure 12-3 Growth of export pipeline capacities in 2004-2014 (optimistic scenario)
Figure 12-4 Growth of export pipeline capacities in 2004-2014 (conservative scenario)
Figure 12-5 Forecast of export railway capacity increase in 2004-2014
Figure 12-6 Forecast of crude export from Russia in 2004-2014 (optimistic scenario)
Figure 12-7 Forecast of crude primary distillation in Russia, 2004-2014 (optimistic scenario)
Figure 12-8 Forecast of crude export from Russia in 2004-2014 (conservative scenario)
Figure 12-9 Forecast of crude primary distillation in Russia, 2004-2014 (conservative scenario)
Figure 13-1 Gas oil import/export balance in Europe, mln. of tons
Figure 13-2 Gas oil export by producing regions in 2002
Figure 13-3 Gas oil production and consumption in Europe (mln. of tons)
Figure 13-4 Gas oil consumption by main segments (mln. of tons)
Figure 13-5 Consumption of motor gasoline and gas oil in transport segment (mln. of tons)
Figure 13-6 Excess of prices for high octane gasoline over gas oil prices (in US cents)
Figure 13-11 Main Gas oil exporters to Germany in 2002 (thousands of tons, %)
Figure 13-13 Primary distillation capacities (thousands of barrels per day)
Figure 13-15 Main suppliers to France in 2002 (thousands of tons, %)
Figure 13-18 Gas oil exports from Italy in 2002 (thousands of tons), %)
Figure 13-20 Dynamics of refining capacity development in Spain and Italy (thousands of barrels per day)
Figure 13-22 Main suppliers to Spain in 2002 (thousands of tons, %)
Figure 13-27 Larger Gas oil exporters to Netherlands in 2002 (thousands of tons, %)
Figure 13-31 Spread German diesel (10 ppm) to gas oil L-62-02 (USD/ton)
Figure 13-32 Forecast of gas oil consumption and production in Europe (millions of tons)
Figure 13-33 Forecast of gas oil consumption by transport in Europe (millions of tons)
Figure 13-34 Primary distillation capacities in Europe (millions of barrels per day)

Table 4-1 Refining industry concentration in 2004
Table 4-2 Russian refineries base performance in 2004
Table 4-3 Russian refining capacity in three major capacity groups
Table 4-4 Top six refineries in production of key petroleum products
Table 4-5 Approximate yield per ton of crude (%)
Table 4-6 Secondary processes margin at hypothetical refinery in the end of 2004
Table 4-7 Share of secondary refining capacity utilization compared with primary distillation in Russia (%)
Table 4-10 Gross margin of some processes in internal prices for oil products and in Urals export prices, as of October 2004
Table 4-16 Key process capacities utilization in % to installed capacity dynamics
Table 4-23 Top six producers of high octane gasoline
Table 4-24 Top six producers of low octane gasoline
Table 4-27 Top six producers of Gas Oil in Russia
Table 4-29 Top six producers of fuel oil in Russia
Table 6-1 Brief description of implemented and planned refineries refurbishment projects in Russia
Table 7-12 Forecast of domestic motor gasoline consumption in Russia, 2005-2014 (optimistic scenario) (thousands of tons)
Table 7-13 Forecast of domestic motor gasoline consumption in Russia, 2005-2014 (conservative scenario) (thousands of tons)
Table 7-18 Forecast of domestic gas oil consumption in Russia, 2005-2014 (optimistic scenario) (thousands of tons)
Table 7-19 Forecast of domestic gas oil consumption in Russia, 2005-2014 (conservative scenario) (thousands of tons)
Table 7-25 Forecast of domestic fuel oil consumption in Russia, 2005-2014 (thousands of tons)
Table 8-1 Gasoline exports by routes in 2000-2004 (thousands of tons)
Table 8-2 High octane gasoline exports by routes and exporters in 2003 (thousands of tons)
Table 8-3 Gas oil exports by routes in 2000-2004 (thousands of tons)
Table 8-4 Fuel oil exports in 1998-2004 (thousands of tons)
Table 8-5 Russian fuel oil exports by routes in 2004 (thousands of tons)
Table 9-3 Refinery (NORSI) netback for route Novorossiysk - Mediterranean as of May 2005 (USD)
Table 9-4 Netback at VIRTUAL COMPLEX REFINERY (Nizhni Novgorod), route Novorossiysk-
Mediterranean, as of May 2005 (USD)
Table 10-2 Russian key car fleet owners
Table 10-5 Gas oil exports by key refineries by routes in 2003 (sales to the first buyer) (thousand of tons)
Table 10-7 Gas oil exports (sulfur up to 0,05) by main refineries of the Project by routes in 2003 (sale to the first buyer) (thousands of tons)
Table 10-6 Gas oil exports from the refineries of the Sever project by routes in 2003 (thousands of tons)

Table 10-7 Costs for gas oil exports from the refineries of the Sever project by routes in 2003(USD/ton)
Table 10-8 Main alternative projects of gas oil export, 2004-2014
Table 10-13 Dynamics of railway tariffs on gas oil transportation by routes in 2001-2003, rub/ton
Table 11-2 Average monthly growth of oil product prices on the domestic market from 2002 to the first six months of 2004
Table 11-8 Netback price calculations for AI-95 gasoline (export and domestic market) as of May 2004 -NORSI depot - Novorossiysk - Mediterranean (USD per ton)
Table 11-10 Netback price calculations for AI-95 gasoline (export and domestic market) as of May 2004 -NORSI depot - Novorossiysk - Mediterranean (USD per ton)
Table 12-1 Projected crude production by oil companies in 2004-2014 (optimistic scenario), millions of tons
Table 12-2 Projected crude production by oil companies in 2004-2014 (conservative scenario),
millions of tons
Table 12-3 Existing export pipeline capacities and their utilization in 2003
Table 12-4 Prospective projects of export pipelines expansion in 2004-2014
Table 12-5 Growth of export pipeline capacities by routes in 2004-2014 (optimistic scenario), millions of tons
Table 12-6 Growth of export pipeline capacities by routes in 2004-2014 (conservative scenario),
millions of tons
Table 12-7 Key perspective projects of crude export terminals for railway export in 2004-2014
Table 13-7 Gas oil consumption by countries (thousands of tons)
Table 13-8 Main features of gas oil market in Germany (thousands of tons)
Table 13-9 Gas oil consumption by economy sectors (thousands of tons)
Table 13-10 Forecast of economy growth and car purchases in Germany
Table 13-12 Main features of gas oil market in France (thousands of tons)
Table 13-14 Gas oil consumption by economy sectors in France (thousands of tons) in France
Table 13-16 Key features of the Italian gas oil market (thousands of tons)
Table 13-17 Gas oil consumption by economy sectors in Italy (thousands of tons)
Table 13-19 Main features of the Spanish gas oil market (thousands of tons)
Table 13-21 Gas oil consumption by economy sectors in Spain (thousands of tons, %)
Table 13-23 Key features of the UK gas oil market (thousands of tons)
Table 13-24 Gas oil consumption by economy sectors in UK (thousands of tons)
Table 13-25 Key features of the gas oil market in Netherlands (thousands of tons)
Table 13-26 Gas oil consumption by economy sectors in the Netherlands
Table 13-28 European countries net gas oil exporters (thousands of tons)
Table 13-29 European countries net gas oil importers (thousands of tons)
Table 13-30 Schedule of introduction of environmental standards and quality requirements to gas oil in Europe