Business news

20 Apr 2019

Belarus to discuss compensation for substandard Russian oil with Transneft

MINSK, 20 April (BelTA) – Belarus is working to minimize consequences of the substandard oil received from Russia and is going to discuss the necessary compensation mechanisms with PAO Transneft, BelTA learned from Chairman of the Belarusian state petrochemical concern Belneftekhim Andrei Rybakov.

Mozyr Oil Refinery was the first enterprise to detect serious deviations from quality standards in the oil coming from Russia. In some samples the content of chlororganic compounds exceeded the norm by 100 times. Such compounds are noted for high corrosive aggressiveness. They can clog heat exchange equipment and poison an expensive catalyst unit. Since the equipment is unique, its repairs can take half a year and more than that. “We are talking about at least dozens of millions of U.S. dollars in monetary losses while the damage can go as high as hundreds of millions of U.S. dollars,” Andrei Rybakov explained.

Taking into account the length of the oil pipeline, the substandard oil has yet to reach the Belarusian oil refinery Naftan. “Bearing this in mind, we’ve decided to reduce the oil processing workload at Naftan by 50%. It will allow us to better prepare for minimizing possible consequences,” he specified.

The Belneftekhim head noted that substandard oil had been localized in technical passages. This product is no longer part of the processing cycle. This is why the two Belarusian oil refineries continue making only quality products – gasoline and diesel fuel – that match all the standards. The domestic market will be supplied with quality automobile fuel.

According to Andrei Rybakov, the Belarusian oil refineries had actually to act as a filter of the negative effects triggered by the infusion of the poor-quality product into the oil pipeline.

“This oil will have to be replaced with a quality product without excessive content of chlororganic compounds. We are working on it and expect information from the Russian side,” he remarked.

Speaking about consequences of having to deal with the substandard oil, the official noted it is difficult to estimate the damage because some consequences may surface some time later. “All the consequences will be discussed with Transneft. The Belarusian side will insist that compensation mechanisms should be worked out,” the Belneftekhim chairman said.

In the last few days the quality of Russian export oil mixture Urals delivered in transit via the main oil pipeline of OAO Gomeltransneft Druzhba dropped drastically. Belneftekhim representatives stated it had never happened before. The system of oil pipelines Druzhba is used to deliver oil not only to two Belarusian oil refineries but also to Europe via Poland and Ukraine.