In Russia proposed to create a new variety of cheap oil

Transneft proposes to create a new variety of Russian oil Ural Heavy, said the Director of the Department of planning and accounting flows of the company Igor Katsal on the public Board. It is assumed that the basis of new varieties will be the oil of the Ural-Volga region, which will be partially withdrawn from the main Russian export Urals blend.

In Russia already there are several basic grades of oil: heavy mixture Urals (the price is calculated with a discount to Brent), crude oil Siberian Light (produced in the Khanty-Mansiysk Autonomous Okrug), ESPO (Eastern Siberian oil brand), Sokol (Sakhalin-1), Vityaz (Sakhalin-2), Arctic grade ARCO (the “Prirazlomnoye” oil field, developed by Gazprom Neft).

Brent Ural Heavy will be different from the Urals higher sulfur content: 2.3 to a 3.5% instead of 1.3% and 1.7% respectively. According to Kacala, to ship oil to consumers will be in the port of Ust-Luga in the amount of up to 30 million tons of oil per year.

According to the official representative of “Transneft” Igor Demin, in Russia annually produces 84 million tonnes of crude oil with high sulphur content. This oil is Rosneft, LUKOIL, Tatneft, Bashneft and other companies.

KazAL, at the expert Council of “Transneft” reported that Russia exported annually about 60 million tons of high-sulfur crude oil every year this amount increases by 2.5 million tonnes. According to him, the creation of new varieties will allow companies to avoid the discount which they will be forced to do if the volume of sales of high-sulphur oil under the brand name Urals will continue to increase.

Vice-President of Transneft Sergey Andronov in December last year estimated construction costs of the pipeline from Ust-Luga to sour crude oil of about 2.5 billion rubles, and the construction period is one year.

According to senior analyst of Sberbank CIB Valery Nesterov, the problem of increasing the sulfur content and density of Russian oil will become particularly relevant in 2018 due to the increase production of sulfur and bitumen oil. This time can be used for approval of construction of the pipe. The expert believes that the allocation of sulfur flow of oil will worsen the economy of those companies that produce a large quantity of this oil, especially the “Tatneft” and “Bashneft”, although this oil is from other companies. “It is unlikely that such companies will agree to the appearance of sulfur flow without obtaining preferences from the state or tax exemptions. Those companies that produce a little sour crude oils will not incur economic losses and may even win by improving characteristics of the Urals and growth of its cost”, said Nesterov. The loss of the budget from reduction of export duties for supplies of sour crude oil will also be offset by the increase in the price of Urals easier, he adds.

Demin explains that the selection of individual sour grades of oil will also help to protect refinery equipment from wear and corrosion. On the quality of the oil factories complain of the Central group, for example, the Kirishi refinery, which is owned by “Surgutneftegaz”. At the end of August last year, the President of LUKOIL Vahid Alakbarov has already drawn the attention of Deputy Prime Minister Arkady Dvorkovich on the deterioration of the quality of oil flowing to the refinery. “A number of European companies, including MOL Hungarian and Finnish Neste, dissatisfied with the decline in the quality of supplies of Russian oil mixture Urals”, Alekperov told reporters in December last year, citing customer complaints.