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Russian-UK oil firm mounts USD 537m refinery upgrade

18th October 2012

TNK-BP will invest USD 537m to boost Euro-5 motor fuels production at Ryazan oil refinery

Russian-UK oil firm mounts USD 537m refinery upgrade
A new technical motor fuel quality regulation will enforce a gradual nation-wide transition to less pollutant Euro-4 and Euro-5 standard gasoline

Russia’s third largest oil producer will invest USD 537m in the modernisation of facilities at its Ryazan oil refinery  in western Russia, the company announced on Tuesday, as part of nation-wide plans to transition to more environmentally-friendly fuels.

TNK-BP, a petroleum company jointly owned by UK major BP and the Russian Alfa-Access-Renova (AAR) consortium, has announced that it will allocate USD 537m to upgrade its Ryazan oil refinery to foster a “full transition to Euro-5 motor fuels production,” TNK-BP said in a press release on Tuesday.

“In July 2012, the Ryazan Refinery switched to producing 95 and 98 octane motor fuels of Euro-5 standard. Achieving a complete transition to fuels meeting the highest environmental standard is a strategic objective for RORC [Ryazan Oil Refinery Company],” said Anatoliy Skoromets, RORC’s General Director.

The Ryazan Oil Refinery Company (RORC) is TNK-BP's biggest refining subsidiary, according to the Russian-UK oil company.

“The project is being implemented under a four-party agreement between TNK-BP, the Federal Ecological, Technological and Atomic Supervision Service, the Federal Agency for Technical Regulation and Metrology, and the Federal Antimonopoly Service,” Skoromets added.

Ryazan has a total capacity of 17 million tonnes of oil per year. Euro-5 currently accounts for 49 per cent of its total output, TNK-BP said. The modernisation project will be implemented between 2012 and 2015.

Gazprom subsidiary and Russia’s fifth largest oil producer, Gazprom Neft has also joined the Euro-5 bandwagon. It announced on 9 October that its Omsk refinery had increased production of Euro-4 and Euro-5 gasoline by twentyfold.

The moves toward Russian downstream modernisation come high on the heels of a new technical motor fuel quality regulation which will be implemented in Russia at the end of December 2012 to enforce a gradual nation-wide transition to Euro-4 and Euro-5 standard gasoline. The Euro-4 and Euro-5 are a new environmental standard aimed at producing less pollutant fuels with lower concentrations of sulphur and aromatics.

The regulation establishes that Euro-2 standard gasoline and diesel must cease from 1 January 2013, while Euro-3 will be allowed up to 31 December 2014 and Euro-4 until 31 December 2015.


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