22 May 2012 18:18 [Source: ICIS news]
BARCELONA (ICIS)--While currently facing challenging times, the evolution of the Russian refining industry means that exports of crude oil and some refined products are expected to increase over the next few years, an industry expert said at the sixth annual Global Refining Summit in Barcelona on Tuesday.
Dmitry Spivakovsky, director of downstream strategy, investment governance and planning at TNK-BP said exports of crude oil from Russia to “far abroad” (outside the Commonwealth of Independent States) may increase from 41% to 49% by 2014.
Crude oil exports to Europe may grow by 12m–20m tonnes per annum from 2012.
In the refined product markets, Russian exports of liquefied petroleum gas (LPG) are expected to triple by 2016–17.
The Russian fuel oil market is structurally long, and exports of this product could increase too.
Exports of naphtha are expected to remain constant for as long as crude oil prices remain high, Spivakovsky said.
However, exports of other Russian products are likely to remain restricted.
Gasoline demand is the main driver of the Russian refining industry, with domestic consumption having grown by 3.1% between 2006 and 2010. The Russian gasoline market is therefore expected to remain tight, with little material available for export.
Likewise, nearly all expected incremental diesel supply will be absorbed by growing domestic demand.
Jet fuel is also expected to remain tight in Russia with limited exports.
Russian refineries are currently finding the pace of new European fuel specifications highly challenging, Spivakovsky said.
Furthermore, Russian refining is dependent on fiscal subsidies by the government.
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