2016 will bring a marked acceleration of Russian secondary capacity growth, resulting in a pronounced decline in dirty product yields. (For more analysis of key trends in the Russian oil sector, see our quarterly Russia Focus report)

  • In Russia, conversion and other secondary capacity additions have begun to outpace CDU expansions, a sign that the first phase of the country’s modernisation programme, which focussed on increasing crude capacity, has begun winding down.
  • We expect roughly 420,000 b/d of new conversion capacity to come online next year, with some of the largest projects including a 70,000 b/d VGO hydrocracker at Lukoil’s Volgograd refinery and a 55,000 b/d coker at the independent Antipinsky refinery. In addition, our forecasts point to 125,000 b/d of additional VDU capacity next year, at Rosneft’s Komsomosk, Alliance’s Khabarovsk, and the independent Afipsky refinery.
  • These new units should increase Russian gasoline yields while cutting into fuel oil and secondary feedstock output. Our in-house SuDeP model forecasts a more than 110,000 b/d decline in Russian fuel oil production in 2016, compared to a 65,000 b/d increase in gasoline output.