Russia’s Novak: Diesel Export Ban Unwarranted, Situation Clarified
Deputy Prime Minister Alexander Novak stated on Friday that Russia does not need to impose a ban on diesel exports to address the increasing prices and potential shortages caused by drone attacks that have disrupted refining capacity. Novak’s remarks came during a press briefing where he also mentioned ongoing discussions regarding liquefied natural gas (LNG) deliveries for the Novatek-led Arctic LNG 2 project, which has faced challenges due to Western sanctions.
Following the drone attacks and technical outages, Russia has experienced a significant reduction in oil refining capacity, leading to a ban on gasoline exports for six months starting from March 1. The drone attacks have affected approximately 14% of Russia’s total oil refining capacity, with a notable increase in offline primary oil refining capacity in March compared to February.
Despite these challenges, Novak assured that other oil refineries have ramped up their production to compensate, and the government is addressing issues related to fuel deliveries amid railway bottlenecks. He emphasized that the current situation in the oil products market is stable, with companies increasing output to meet demand for gasoline and diesel fuel.
Regarding the technical outage at the Norsi refinery, Novak mentioned that efforts are underway to resume operations within a month or two, with one of the catalytic crackers remaining out of action at the plant.
In discussions about the Arctic LNG 2 project, which plays a crucial role in Russia’s LNG market ambitions, Novak noted that Novatek is negotiating cargo delivery amidst challenges posed by sanctions and the need to secure gas carriers. Foreign shareholders had previously suspended their participation in the project due to sanctions concerns.
Responding to inquiries about the timeline for the project’s first LNG cargo delivery, Novak stated that the company is addressing the challenges, particularly related to securing tankers for transportation.
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