MOSCOW – Russias base oil production increased 3 percent in the first half of 2018, compared to 2017s first half, and the trend was forecasted to continue for the rest of 2018 thanks to a surge in vehicle sales and increased base oil exports.
The Commonwealth of Independent States – a loose political body comprised of Russia, Belarus and some Central Asian countries – has over 3 million tons per year of base oil capacity, Dimitry Terentiev, business development manager at Argus consultancys Moscow office, told RPIs Global Lubricants conference here in October.
Argus expects Russias base oil production for full-year 2018 to increase because the countrys car sales rose significantly in 2018, and base oil exports surged 15 percent in the first half of the year. Russian passenger car and light commercial vehicle sales reached 1.6 million units for the first 11 months of 2018, up 14 percent from the same period in 2017, according to the Moscow-based Association of European Businesses. The group, which represents and promotes the interests of European companies conducting business in and with the Russian Federation, has not yet published results for full-year 2018.
In addition, foreign base oil shipments to Russia decreased by 9 percent in the first half of 2018, compared to the same period last year. Volumes of base oils that Russian refiners kept in-house for their own finished lubricant production rose by 2 percent.
Russia exported 514,000 tons of base oil in the first half of 2018. The largest portion – totaling 208,000 tons – was handled by ports on the Baltic Sea while 153,000 tons went to Eastern Europe and Baltic States via land routes, 88,000 tons were shipped via the Black Sea or exported by river, and 66,000 tons were shipped to East and Central Asia and the Caucasus region, according to Argus.
Characteristic for [2018s] first half is that the base oil shipments to Turkey decreased by half, as a result of more active competition by other international market players and lower consumption in Turkey, Ternetiev said.
Argus found that Tatnefts Nizhnekamsk refinery increased its Group III base oil output from 73,000 tons in the first half of 2017 to 89,000 tons for 2018s first half. Meanwhile, Slavnefts Yaroslavl refinery boosted its Group III base oil output from 5,000 tons in the first half of 2017 to 49,000 for the same period in 2018. Tatnefts Group II output increased from 17,000 tons in 2017s first half to 32,000 tons in 2018s first half.
The Nizhnekamsk plant has capacity to produce 190,000 t/y of Group II and Group III, while Slavneft has 100,000 t/y of Group II and Group III and 150,000 t/y of Group I production capacity. Slavneft is a joint venture between state-owned Rosneft and Gazprom Neft.
Argus also found that there is a widening spread between Group I solvent neutral 150 product and Group II N150 product. Terentiev said this reflects slowing demand in Europe for Group I.