Russia builds oil refineries amid crisis

Russia builds oil refineries amid crisis
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Over the past 18 years, Russia has created an essentially new giant industry, the third largest in the world. Of course, the petrochemical industry has been in Russia before, but in 18 recent years it has been completely rebuilt. From scratch. A rebirth of the industry occurred on the sites of abandoned land plots and old, outdated factories.

In the beginning, there were 26 morally and physically aging oil refineries that Russia received as remnants from the USSR period. Eight of these plants were put into operation before the Great Patriotic War of 1941, five were built in the 1950s and nine were built in the decade that followed.

The only relatively new oil refinery was the Achinsk plant, which was put into operation before M. Gorbachev started his Perestroika.

By and large, the oil refining industry was on the verge of a complete shutdown in 2000. All refineries were not only obsolete, but also physically worn out, and required demolition rather than reconstruction. In fact, this is exactly what has happened in the last 20 years. However, the factories were not just demolished. Super-duper modern giants emerged in their place!

If you just think about the sheer scale and size of the investment - it is breathtaking! For the uninitiated, all this seems like another plant dealing with some raw material. In reality, if you visited any petrochemical production facility, you would understand that this is a complex technology that includes dozens of operations.

The petrochemical industry has always been the foundation of any industrial complex, the pride of any highly developed country. Today, Russia is the third country in the world to produce petrochemical products.

Moreover, just recently Russia was a net importer of many polymers, such as polyethylene. Today, the country not only covers all domestic needs, but also export this product.

Since the days of the Soviet Union, the output of gasoline, for example, was about 70%. The rest was fuel oil, a type of waste from petrochemical production. Fuel oil was burnt in boilers and power plants, killing nature, and it was exported in large volumes. It sounds unthinkable today, but more than 30% of the produced oil is fuel oil and waste.

Nowadays, Russia does not export fuel oil and almost does not produce it. The output of fuel oil in 2019 amounted to 47.3 million tons. It is the minimum figure for more than 50 years.

The fuel oil’s place in the export of refined products was taken by finished products, such as diesel fuel, gasoline, and polymers. Major restructuring of the industry allowed many refineries to achieve oil refining rate close to 100%. On average, the depth of oil refining in Russia in 2019 was 82.7%, (the average European level) while in 1999 it was 67.4%.

The volume of oil refining in 2019 amounted to 290 million tons. Russia secured 3rd place in the world, overtaking India with 250 million tons but still trailing behind the United States with approximately 800 million tons in 2019 and China with more than 650 million tons.

The horizons are only broadening from here. The country is showing no signs of slowing down. Today, Russia has already exceeded the USSR's indicators for processing oil and gas, and it has done so at the highest technological level, building a new industry that is much more efficient.

The country is currently building a number of giant plants that will soon make it an absolute leader in many areas of oil refining, allowing in many cases to stop exporting crude oil, replacing it with products of deeper processing cycles.

This is an apparent success of the country’s strategy that started to give fruit after a massive modernization attempt that spanned long 18 years.

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