FSU refineries: Onako's Orsk refinery

Mar 14, 2000 01:00 AM

by Heiko Pleines

The Onako company produces roughly as much crude oil as its Orsk refinery (Orsknefteorgsintez) is able to process. However, there is no pipeline link between Onako's production unit, Orenburgneft, and the Orsk refinery, which is situated some 250 km eastward of the company's oil fields. Instead, the refinery lies on the oil pipeline running from the Kazakhstani part of the Caspian Sea to the Russian republic of Bashkortostan.
As a result, the refinery's biggest crude supplier, with deliveries of nearly 1.8 mm tons in 1999, is Kazakhstan. Orenburgneft comes second, as it sent only 1 mm tons of oil to the refinery last year. The third major crude supplier is Bashneft, with 600,000 tpy. However, these deliveries are far too low. In processing 4 mm tons of crude, the refinery was working at a mere 50 % of capacity last year.

It now looks likely that Orenburgneft will direct its business even further away from the Orsk refinery. Yukos has reportedly already acquired 31 % of theoil producer. One consequence of this will be an increase in crude deliveries to Yukos' refineries in Samara. And Bashneft, situated in a region with four major oil refineries and facing a permanent decline in production levels, is also highly unlikely to increase supplies to the refinery in the Orenburg region. The Orsk refinery, in its turn, is trying to expand its business with Kazakhstan. In the latest deal, the Kazakhstani oil producer Aktobemunaigaz agreed to deliver 1 mm tpy of crude to the refinery under a swap deal with Onako. The oil company will provide similar volumes for export on behalf of Aktobemunaigaz.

The Chinese National Petroleum Company (CNPC), which is the majority owner of Aktobemunaigaz, has also suggested that crude supplies to the Orsk refinery could be swapped for Siberian oil shipments to northeastern China. These shipments could be made by Yukos as payment for deliveries from Orenburgneft.
In order to improve its market position, the Orsk refinery has carried out some upgrading measures. Last year, it launched an unethylated AI-93 grade gasoline production line and completed an upgrade project designed to permit the production of diesel fuel in compliance with world standards.

Source: NewsBase
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