Oil industry

Russia has the largest oil and gas reserves in the world and is the second largest oil producer with a 13% share of total global oil output. The upstream oil industry is the backbone of the economy and is one of the main sources of investment resources, which impacts Russia’s international payments and exchange rate.

Upstream

According to Russia’s Ministry of Energy, oil output in Russia in 2015 reached 534.0 million tons (+1.4% yoy). This increase was maintained by the development of new oil production centres in Eastern Siberia and the start of major crude oil exports to Asia, primarily to the People’s Republic of China where demand for Russian oil is increasing.

XLS
XLS
XLS

Midstream

With over 74 thousand kilometres of oil pipeline and more than 500 installed pump stations; Russia has the largest oil pipeline system in the world. The existing trunk pipeline system transports over 90% of the crude oil produced in Russia.

Transneft, the only oil pipeline operator in Russia, has increased its oil exports by 7.4% year-on-year to 229.6 million tons in 2015.

The existing pipeline system is currently expanding through the following projects:

  • The Zapolyarye-Purpe main pipeline
  • The Kuyumba-Taishet main pipeline
  • Expansion of the ESPO (East Siberia - Pacific Ocean) pipeline system
  • Reconstruction of main pipeline projects TON-1 and TON-2 for high-sulphur oil transportation
  • The North pipeline
  • The South pipeline

Transneft’s total capital expenditure is estimated at 333.4 billion rubles in 2015.

Downstream

There are 40 oil refineries in Russia with a total crude oil distillation capacity of 5.5 million b/d. Rosneft, the leading Russian oil company, is the largest refinery operator and owns nine major refineries in Russia. LUKOIL is the second-largest refinery operator in Russia and has four major refineries.

In Russia, many refineries are old and do not manufacture their main products – light oil products with a high level of refining depth such as petrol and diesel – at a high quality level.

Previous tax changes have encouraged companies with modest success to invest in the modernisation of refineries to produce more high-value products such as diesel and gasoline. Tax changes introduced in 2015 will stimulate refineries to more intensively modernise their production facilities.

XLS

Growth in the oil refinery industry is likely to be driven by several new projects:

Isomerisation process units:

  • Kuybyshevsky Refinery (Rosneft)
  • Ryazan Oil Refinery Company (Rosneft)
  • Gazpromneftekhim Salavat (Gazprom)

Alkylation process units:

  • NizhegorodNOS (LUKOIL)
  • Angarsk Petrochemical company (Rosneft)

Diesel hydrotreating process units:

  • PermNOS (LUKOIL)
  • Antipinsk Refinery (Rosneft)

Reforming process units:

  • Kuybyshevsky Refinery (Rosneft)
  • Novokuybyshevsky Refinery (Rosneft)

Catcracked gasoline hydrotreating process units:

  • NizhegorodNOS (LUKOIL)

Gas pipeline projects

Gazprom is the single owner of virtually all natural gas pipelines in Russia. In 2015, the Russian natural gas transportation system included more than 170 thousand kilometres of high-pressure pipelines with 250 compressor stations (3,825 gas-pumping units) and 26 underground natural gas storage facilities. The majority of Russian natural gas pipelines were constructed during the Soviet era and about 75% of the system is over 20 years old. Since the late 2000s, Gazprom has built major new pipelines for natural gas transportation from new gas fields, including fields in Yamal and Eastern Siberia, and new export routes, including exports to China as well as pipelines to Europe in order to avoid Ukraine.

The Unified Gas Supply (UGS) system includes domestic pipelines and the domestic part of export pipelines in European Russia; however it does not include pipelines in Eastern Russia. In 2007, the Russian government delegated to Gazprom to establish the Eastern Gas Program (EGP) to expand gas infrastructure in Eastern Siberia and the Russian Far East. The backbone of the EGP is the “Power of Siberia” pipeline which is currently under construction.

The Unified Gas Supply (UGS) system includes domestic pipelines and the domestic part of export pipelines in European Russia; however it does not include pipelines in Eastern Russia. In 2007, the Russian government delegated to Gazprom to establish the Eastern Gas Program (EGP) to expand gas infrastructure in Eastern Siberia and the Russian Far East. The backbone of the EGP is the “Power of Siberia” pipeline which is currently under construction.

Gazprom has approved a US$ 33 billion investment program for 2015.

Pipeline Volume, bcm Length, km Compressors, MW Construction
Gryazovets-Vyborg 9.4 216 25 2014-2017
UGSS Expansion 63.0 2,506 1,516 2014-2017
Bovanenkovo-Ukhta, second line 60.0 1,915 1,108 2014-2017
Ukhta-Tozok, first and second lines 90.0 2,343 1,430 2014-2017
Power of Siberia 61.0 3,056 1,330 2015-2018
Your page has been added successfully. Please click on "My Annual Report" () to see your selection.
Link für Popup
Scroll Top