Page 24 - 2020 CORPORATE PROFILE FUELQO ENERGIA LIMITED

Strictly Private & Confidential

have the facilities to blend or break it down into more conventional petro-chemicals. In the West,
furnaces that burn Mazut are commonly called "waste oil" heaters or "waste oil" furnaces. Mazut-100
is a fuel oil that is manufactured to GOST specifications, for example GOST 10585-75 (not active), GOST
10585-99 Oil fuel.

Mazut Specifications (active, last modified 07.01.2010). (GOST is the Russian system of standards).

Mazut is almost exclusively manufactured in the Russian Federation, Kazakthan, Azerbaijan, and
Turkmenistan. This product is typically used for larger boilers in producing steam since the BTU content
is high. The most important consideration (not the only consideration) when grading this fuel is the
sulfur content which can mostly be affected by the source feedstock. For shipment purposes, this
product is considered a” dirty oil” product, and because viscosity drastically affect whether it is able
to be pumped, shipping has unique requirements. Mazut is much like Number 6 Oil and is part of the
products left over after gasoline and lighter components are evaporated from the crude oil. The main
difference between the different types of Mazut-100 is the content of sulphur. The grades are

represented by these sulfuric levels:

• ” Very Low Sulphur” is Mazut with a sulphur content of 0.5%
• ” Low Sulphur” is a Mazut with a sulphur content of 0.5-1.0%

• ” Normal Sulphur” is a Mazut with a sulphur content of 1.0-2.0%
• ” High Sulphur” is a Mazut with a sulphur content of 2.0-3.5%

Very Low Sulfur Mazut is generally made from the lowest sulfur crude feedstock. It has a very limited
volume to be exported because:

• The number of producers in Russia is very limited. Refineries which produce Mazut are generally the
largest of oil companies, such as Lukoil and Rosneft.
• A minimum of half of the total volume is sold only to the domestic market in Russia and the CIS markets
• Most of the remainder of this specific product is reserved by state quotas for state controlled
companies abroad.
• The remaining volumes available for export are sold per state quotas, via state auctions, accessible
only to Russian domestic companies with special access and experience with these auctions.

Low to high sulfur Mazut is available from Russia and other CIS countries (Kazakhstan, Azerbaijan, and
Turkmenistan). The technical specifications are represented in the same way, according to the Russian
GOST standard 10585-99. The Russian origin Mazut demands higher prices.

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