Overview
Roseneft is the leader of Russian refining industry. Sustainable development of the downstream sector is one of the Company’s key strategic objectives. The main goal of Roseneft in this area is to boost volumes of high-quality product sales with high added value directly to the end consumer. In order to reach this goal, the Company is rapidly developing and boosting its refining capacities and sales network.
The structure of the Company includes nine major oil refineries enterprises in the Russian territory: Komsomolsk Refinery, Tuapse Refinery, Kuibyshev Refinery, Novokuibyshevsk Refinery, Syzran Refinery, Achinsk Refinery, Saratov Refinery, Ryazan Oil Refining Company and Angarsk Petrochemical Company. Besides, the Company holds 50% interest in Slavneft-YANOS and 95% in LINIK (Ukraine). The summary design capacity of the main oil refining enterprises in the territory of Russia makes up 95.1 million tons of oil per year.
The Company holds shares in several mini-refineries in the territory of the Russian Federation, where the refining volumes in 2014 totaled 1.9 million tons. The largest mini-refinery is the Nizhnevartovsk refining association there the refining volume reached 1.5 million tons in 2014. In Germany Rosneft holds shares in four refineries with the capacity of 11.5 million tons (in terms of the Company share).
The Company also manufactures petrochemical products in Russia at Angarsk polymer plant, which specializes in production of ethylene, propylene and polyethylene. The capacity of the thermal decomposition unit – the main processing plant of the enterprise – makes up 300 thousand tons of ethylene per year.
In March, 2015, the Company acquired the petrochemical holding SANORS (Novokuibyshevsk Petrochemical Company). NPC is a major producer of gas processing, petrochemistry and organic synthesis products in the territory of Russia and Eastern Europe.
Roseneft is actively developing the production of oils.
The basic production sites are Novokuibyshevsk Oils and Additives Plant, oils production facility in Angarsk Petrochemical Company, Moscow Plant Nefteprodukt and oil plant OOO RN-Lubricants, Ryazan, and the refinery of OAO Slavneft-YANOS (ownership interest). The summary capacity of these enterprises exceeds 700 thousand tons per year in commodities, specifically, it makes up over 500 thousand tons of oils per year.
The Company structure also comprises Neftegorsky and Otradnensky gas treatment plants in Samara region, summary capacity whereof makes up 1.8 bcm of gas per year..
Petrochemicals
Main part of the Company petrochemicals is produced by Angarsk Polymer Plant. Angarsk Polymer Plant is the only petrochemical plant in the East Siberia, which produces 200 K tons of ethylene, 100 k tons of propylene and 60 K tons of benzene annually. Part of the produced ethylene is sent to Sayankhimplast as feedstock, part is used for the production of high pressure polyethylene and other types of petrochemicals. Straight-run gasoline and hydrocarbon gases, mainly produced by Angarsk Petrochemical Company are used as feedstock for the plant.
Plant refurbishment program was developed with the following targets:
- Reconstruction of pyrolysis unit to increase its capacity by 1.5 times (up to 450 K tons of ethylene per year);
- Construction of low pressure polyethylene production with 345 ktpa capacity;
- Construction of polyethylene production for the production of 250 ktpa polymers of broad product range;
- Construction of LPG rail car loading rack with the capacity up to 300 ktpa is completed and the rack is commissioned, which will make it possible to reduce feedstock costs.
In 2015 Angarsk Polymer Plant processes 660.3 k tons of feedstock and produces 441.0 k tons of marketable products.
Gas Processing
In 2015 Otradnensky Gas Processing Plant and Neftegorsky Gas Processing Plant processed 257.1 and 410.2 mcm of associated petroleum gas, respectively. Total product output was 552 200 tons.
Crude Oil Exports
Roseneft has been implementing a policy aimed at ensuring a required balance of crude monetization channels, including crude oil processing at its own refining facilities in Russia and Germany, export sales under long-term and tender-based spot contracts, and domestic sales.
The Company is monitoring the economic effectiveness of crude monetization channels on an ongoing basis, as a result, in 2014 the share of high margin channels increased to 40.2% of the total volume of crude (vs. 38.9% in 2013).
In 2014, the Company supplied 86.6 mln tons of crude oil to the company-owned refineries in Russia, an 11% growth over 2013 supplies (77.8 mln tons). In addition to crude oil supplies to its own refineries in Russia, in 2014 the Company supplied 3.3 mln tons of equity crude to Ruhr Oel GmbH refineries in Germany, 15% down year-on-year. Reduction in supplies of equity crude to ROG refineries was driven by a decision to substitute equity crude with purchased crude while redirecting the equity crude to other export channels.
In 2014, Roseneft continued supplying crude oil to Mozyr Refinery (the Republic of Belarus) under processing agreement. Total supplies amounted to 2.7 mln tons, a 60% growth vs. 2013. Petroleum products manufactured at Mozyr Refinery were exported, sold domestically through the Company’s retail network, and supplied to the markets of Belarus and Ukraine.
Total supplies to third parties in 2014 amounted to 111.2 mln tons, including 8.8 mln tons of crude oil sold domestically. Crude oil exports totaled 102.4 mln tons. Supplies to Asia Pacific countries appear to be the most lucrative export channel – pipeline deliveries to China, sales in Kozmino and De-Castri ports. Supplies to Asia Pacific grew by 41% year-on-year.
The Company exported 61.1 mln tons of crude oil to North-West, Central and Eastern Europe, Mediterranean countries and other distant foreign countries. CIS exports amounted to 7.8 mln tons. Supplies to Asia Pacific countries amounted to 33.5 mln tons, including 22.6 mln tons of crude oil supplied to China via pipeline under long-term contracts, and the remaining volumes were exported via Kozmino and De-Castri ports.
The largest part of Roseneft’s export volumes are shipped via Transneft facilities, including the trunk pipeline network and the ports. In 2014, most often preferred routes of crude oil supply were:
Domestic Sales of Crude Oil and Gas
Roseneft has been implementing a policy aimed at ensuring a required balance of crude monetization channels, including crude oil processing at its own refining facilities in Russia and Germany, export sales under long-term and tender-based spot contracts, and domestic sales.
The Company is monitoring the economic effectiveness of crude monetization channels on an ongoing basis, as a result, in 2014 the share of high margin channels increased to 40.2% of the total volume of crude (vs. 38.9% in 2013).
In 2014, the Company supplied 86.6 mln tons of crude oil to the company-owned refineries in Russia, an 11% growth over 2013 supplies (77.8 mln tons). Total supplies to third parties in 2014 amounted to 111.2 mln tons, including 8.8 mln tons of crude oil sold domestically.
The Company also supplies natural, dry and associated gas to consumers in the Russian Federation. Associated petroleum gas is supplied to the company-owned gas processing plants (GPP) and to the gas processing complex of SIBUR Holding. Natural and dry lean gas is supplied to consumers via Gazprom’s unified gas distribution system under a gas transportation contract. Natural and dry lean gas is supplied both to end users and regional retail companies in above 30 regions.
In order to increase its share in the gas market the Company is currently moving towards extension of its contracts portfolio and diversification of sales channels. In 2014, Roseneft signed long-term gas supply contracts with RUSAL, EuroSibEnergo, GAZ Group, EuroChem and Fortum for the total amount of above 40 bcm of gas.
In 2014, the Company’s domestic gas sales increased by 46% and amounted to 55.9 bcm of gas, including 32.75 bcm in West Siberia, 3.1 bcm in South Russia, 0.6 bcm in the Far East, 19.4 bcm in European Russia and other regions.
Increased gas supplies in 2014 were driven by extension of the Company’s contracts portfolio as a result of consolidation of ITERA and TNK-BP, which provided Roseneft with access to the consumer market in the premium regions of the Russian Federation.
Increased gas supplies in 2014 were driven by extension of the Company’s contracts portfolio as a result of consolidation of ITERA and TNK-BP, which provided Roseneft with access to the consumer market in the premium regions of the Russian Federation.
In October 2014, Russia launched its first auction of natural gas at the St. Petersburg International Mercantile Exchange (SPIMEX). Rosneft took part in gas trading at two delivery bases (balance points) – Nadym and Vyngapurovskaya compressor stations – for delivery in the next month. Based of the results of three trading sessions (October, November, December) the Company signed supply contracts with end users for the delivery of above 100 mmcm of gas.
Petroleum Product Exports
Roseneft pursues an efficient marketing policy and owns a developed oil product sales infrastructure on the domestic and international markets. Roseneft has significantly increased its petroleum product export sales to 57.6 mln tons in 2014 (vs. 50.6 mln tons in 2013).
In 2014, the Company was successfully monetizing a higher market value of premium quality fuel oil manufactured at Ryazan refinery due to segregated supplies of this product to the Baltic Sea and Black Sea ports.
1.8 mln tons of fuel oil was supplied to the Baltic ports and 1.1 mln tons to the Black Sea ports with extra market premium.
During St. Petersburg International Economic Forum three 5-year contracts for the supply of petroleum products to the Mongolian market were signed with NIK, Shunkhlai and Magnai for the total cost of 2.4 bln US$ and total supply volume of 2.3 mln tons. After the Forum, in May 2014, similar contracts were signed with Mongolian companies Just Oil, Oin Birj, Sod Mongol Group, M-Oil and UBZhD for the amount of 2.2 bln US$ and the supply volume of 2 mln tons. With these contracts the Company will be able to increase its market share in Mongolia up to nearly 80%. All contracts stipulate minimum monthly take amounts.
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