Rosneft Lubricants has started sea shipments of base oils to Europe with its own bulk cargo on free-on-board commercial terms to increase its exports to the continent. Until now, the company primarily used railway to transport base oils westward, a costly practice that involved intermediaries.
The first batch of its solvent neutral 150 and SN500 have been shipped from the port of Kavkaz on a tanker owned by Rosneft, the company said in a recent news release. The port is situated in the Kerch Strait, which connects the Azov and the Black seas.
“Our 140-meter-long vessel is equipped with freight pump manifold, a system of pipelines for loading and unloading oil products,” the company said in its Jan. 19 news release. “This allows us to ship and unload on terminals abroad where vessels should be moored.”
The tanker is operated by Prime Shipping, a logistics operator of oil major Rosneft.
Rosneft officials said that the ability to carry out the company’s own base oil shipments effectively brings it closer to European markets.
“In the near future we are planning to expand the geography of our sea transportation, and this is aimed for those customers who prefer to work with sea delivery on FOB or CFR shipping,” Rosneft said.
“Rosneft could increase its share of supplies in Europe” if its refinery modernization program “continues and quality improves,” said Denis Varaksin, a base oil trader at Berlin-based DYM Resources.
An expansion currently underway at Rosneft’s base oil plant in Novokuybyshevsk, Russia, is designed to add capacity to make 250,000 metric tons per year of API Group II base oils and scheduled to be completed during 2023. The company has said it also intends to upgrade its other base oil plant, in Angarsk, Russia, within three to five years.
Angarsk and Novokuybyshevsk account for 80% of Rosneft’s base oil exports, according to DYM. Both refineries produce Group I base oils. Angarsk has capacity of 230,000 t/y and Novokuybyshevsk 260,000 t/y, according to Lubes’n’Greases’ Base Stock Plant Data.
“Technically, Rosneft was offering base oils on FOB [terms] from Kavkaz port for loading into vessels for several years, but it has attracted limited interest from the buyers due to quality and a long delivery period,” Varaksin said.
Rosneft’s base oils are not registered under REACH, the European Union regulation for safe use of chemicals, he said. “In this case, importers should have their own REACH papers, otherwise they can be seriously fined by the EU regulators,” Varaksin said.