Oil and oil-products

CURRENT ACTIVITY

In 2017, Gazprom Export exported 6.5 mln t of liquid hydrocarbon products and refined products, worth a total of around $1.3 bn. These commodities were sold under commission contracts with Gazprom, subsidiaries, and independent producers of oil and gas chemistry products, on the different supply terms including FCA, FOB, CPT.

Gazprom Export’s product portfolio in 2017 included gas-derived sulfur, stable gas condensate (SGC), gas condensate distillate, benzene, diesel fuel, fuel oil, liquefied petroleum gas (LPG) and small-scale LNG (ssLNG), helium, carbon black, and a number of other petroleum products and petrochemicals. Main producers are the Astrakhan gas refinery, the Orenburg gas refinery, the Surgut condensate stabilization plant (CSP), the Urengoy CTPP, the Sosnogorsk gas refinery and the Salavat oil refinery.

In 2017, the total volume of exported products was comparable to the  level of previous years. To maintain strong sales revenues against a volatile market background, the company has taken steps to improve the efficiency of export supplies, including cost cutting with respect to transportation, transshipment and survey services, by optimizing its sales channels and consolidating export flows.

Petroleum products and stable gas condensate (SGC)

In 2017, the company exported roughly 2.4 mln t of petroleum products and SGC. Due to realized 2nd stage of tax maneuver, which was aimed at supporting the processing and export of light petroleum products, the internal SGC prices turned to be more competitive against export alternatives in 2017. The SGC export volumes fell by one half compared to 2016, and at the same time, share of petroleum products grew. In general, the volume of products exported remained on the previous year level. The main export destinations were Central, Western and Southern Europe, and the Republic of Kazakhstan.

In connection with the planned commissioning of the Amur gas processing plant within the Eastern Gas Program, and in connection with the start of suppling the oil-gas condensate mixture and SGC from the Eastern Siberia fields through the Eastern Siberia – Pacific Ocean pipeline, the markets for oil and oil products in the Asia-Pacific Region are being studied. In 2017, the second export cargo of SGC produced by Kamchatgazprom was delivered by sea to Taiwan.

Sulfur

In 2017, Gazprom Export exported around 2.415 mln t of gas-derived, technical, and granulated sulfur.

Sulfur exports to countries outside the former USSR (the North Africa, the Mediterranean region, etc.) and former Soviet states (Lithuania, Belarus) were carried out on a remote basis, including via Russian river and sea ports.

Despite the oversupply of sulfur from the alternative sources, the company managed to maintain the Group’s traditional markets in Far Abroad (Morocco, Tunisia, Brazil, Israel and Lebanon) and FSU countries (Lithuania and Belarus), and supply the commodity to primary consumers, minimizing the impact of unfavorable factors. Thanks to timely concluded deals, the company managed to capitalize the market opportunities and increase the revenue compared to 2016.

Helium

Gazprom Export exports Gazprom Group’ helium to international markets. Today, the commercial helium is produced by the helium plant of Gazprom Dobycha Orenburg in gaseous and liquid forms in total volume of up to 5 mcm annually. Up to 70% of helium produced is consumed on the internal market of Russia and of the Customs Union, and the rest is delivered for export. The traditional export markets of liquid helium are EU countries and Turkey.

After the Amur gas processing plant, with its helium production capacity planned to reach 60 mcm by 2026, is commissioned in 2021, the helium export portfolio will be diversified, and Gazprom Group will become one of the leading suppliers for the Asian-Pacific region. The helium produced on the Amur plant will be mostly destined for exports. We expect that Japan, China, South Korea, Taiwan and other Asia-Pacific region countries will become its main customers.

Gazprom Export markets helium, signs long-term export contracts, and, together with other Gazprom Group companies and partners, participates in creation of the logistics infrastructure that secures efficient supplies to international markets. In the Russian Far East a dedicated cryocontainers center will be created for helium logistics. Gazprom Export actively participates in designing the functional responsibilities of this specialized infrastructure object.

Liquefied petroleum gas

In 2017, the company exported 272 t of technical propane-butane produced by Gazprom Pererabotka and Gazprom Dobycha Orenburg. Gas was shipped by rail under long-term contracts.

Against the competitive background, the company managed to retain its positions on the major export markets of Poland, Hungary, Bulgaria, Latvia and Finland, and to expand deliveries geographically, by performing test deliveries to Romania and Turkey.

Small-scale LNG (ssLNG) exports

In 2017, export sales of ssLNG by Gazprom Export increased from 22,000 to 35,000 t. Despite the fact that the bulk of export growth occurred on the traditional markets of Poland (from 19,300 t in 2016 to 22,500 t in 2017) and Estonia (from 2,200 t in 2016 to 9,400 t in 2017), the company has also installed regular supplies of ssLNG produced by Gazprom Transgas Ekaterinburg to Kazakhstan, and this new destination ranked third by volume of supplies with 2,600 t. The diversification efforts resulted in the contract for delivering a test ssLNG cargo to Belarus, to the leading Belarussian heavy industry company “Minsk Automobile Plant”. The gas will be used as motor fuel on the innovative APSZ-16 truck which serves for transportation, long-term storage and distribution of LNG.

Gazprom Export continues to expand its presence on the ssLNG markets in Europe and to diversify its ssLNG supplies.

The company markets ssLNG from the existing and developing ssLNG production facilities in Kaliningrad, Kingisepp, Pskov, Petergof, Port of Vysotsk as well as CS Portovaya.

We negotiate on potential cooperation opportunities in joint ssLNG infrastructure projects with Russian and international companies. Such projects can include sea transportation, building of LNG unloading terminals, LNG filling stations and other objects.

Petrochemical products

In 2017, export sales included 27,400 t of carbon black under a commission contract with PJSC Gazprom; 59,300 t of petrochemicals under a commission contract with Gazprom Neftekhim Salavat, and sales of gaseous and liquid helium, and odorants.

Gazprom Export’s traditional markets for oil and gas chemistry products are Europe, CIS, Turkey, and countries of the Customs Union.

Activities under the European REACH Regulations

Gazprom Export and its Special Representative in the EU, GM& T France, are continuing to work on tracking Gazprom Group products registered in compliance with the requirements of REACH/CLP Regulations. We perform constant monitoring of the updates in applicable legislation of the EU and other countries, regarding chemical substances. The safety certificates are being updated in line with the new requirements, including classification and labeling; additional research into the component composition and physical-chemical properties in line with the European Chemical Agency (ECHA) standards is performed. New products are being registered reasonably in advance to ensure their reliable exports to the EU.

 

FUTURE AREAS OF ACTIVITY

Within its Eastern Gas Program, aside from its natural gas part, Gazprom also aims to create a number of large-scale processing facilities in Eastern Siberia and the Far East. With this, by 2020 the commercial production of the oil-gas condensate mixture will start on the Chayanda gas condensate field. Gazprom Export will export this product via the East Siberia–-Pacific Ocean pipeline to China.

As Eastern Siberia’s fields are being developed, the implementation of large-scale projects involving production of helium and LPG in the Amur region evolves into a special area of activities. This development with make Gazprom Group one of the leading supplier of these products to the Asia-Pacific region markets.

Within Gazprom’s massive strategic project for creation of gas production, transmission and processing capacities for the gas from Eastern Siberia, Gazprom Export is working on the helium and LPG marketing, as well as conclusion of the long-term export contracts. Together with other companies and partners of the Group, Gazprom Export participates in creation of logistics infrastructure that secures stable helium and LPG supplies to international markets.

Within the construction on the Novy Urengoy Gas and Chemical complex (NGCC), Gazprom Export joined Gazprom in developing a strategy for the sale of high-pressure polyethylene abroad. This business area encompasses works on optimizing the brand assortment of NGCC products in view of current and future market conditions, as well as analysis of logistical possibilities to deliver the product to its final customers.