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making any disruption a matter of national concern.
Despite the accident occurring during the New Year holidays, when demand was relatively low, the government took swift action, recognizing the potential severity of the situation. The Energy Ministry promptly announced the establishment of an operational headquarters involving major oil companies. These companies reportedly agreed to restrict gasoline exports temporarily, prioritizing domestic requirements. There are indications that the government is contemplating a comprehensive ban on gasoline exports.
The impact of the refinery incident is evident in the State Statistics Service's data, revealing an 11% decline in gasoline production for the week starting January 8 compared to the week starting December 11.
Lukoil’s refinery shut down is a big problem. No sooner had the Russian fuel market recovered from the autumn crisis, which forced the government to introduce a temporary ban on gasoline exports, than it was threatened with a new one, this time due to sanctions. One of the largest oil refineries in Russia, the Nizhny Novgorod Oil Refinery of Lukoil, was forced to halve gasoline production as a result of the accident - and will not be able to repair the equipment in the near future due to sanctions. The Ministry of Energy clearly considers the problem serious - officials have already agreed with the oil industry on a voluntary reduction in exports and are considering a forced one.
As Kommersant found out the day before, on January 12, a serious accident occurred at the Nizhny Novgorod Oil Refinery (NORSI). Due to a breakdown of imported compressor equipment, one of the two catalytic cracking units necessary for the production of high-octane gasoline went out of order. At the end of December, the second unit also failed, but it was able to be restarted at a lower power, Kommersant writes.
NORSI is the largest Lukoil plant and one of the largest in Russia. In 2022, according to Kommersant, it processed 15 million tons of oil - 5% of all refining in the country. The plant’s share in gasoline production is even higher: over the 11 months of 2023, NORSI produced 4.6 million tons - more than 10% of total production in Russia.
Lukoil plans to complete repair work at the refinery by spring, but due to sanctions, it will be impossible to replace equipment in the near future, a source told Kommersant. As experts explained to the publication, at the first stage, the failure of one of the two units will initially lead to a situation where the plant will produce half of the usual volume of gasoline, but over time it will be able to increase output. According to Interfax, Lukoil has already asked competitors to help with the supply of up to 200 thousand tons of AI-95 gasoline in January-February: this is exactly half of the production capacity The reaction of the Ministry of Energy shows that they took the accident more
125 RUSSIA Country Report February 2024 www.intellinews.com