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Statement of Transneft Press Service in relation to a publication of deliberately false information about the work of the Yug petroleum products pipeline

Date of publication: 18 May 2018 Printable version

Russia processes about 280 million tonnes of oil per year, while consuming almost all of the produced petrol. Of the 76.9 million tonnes of diesel produced, the country consumes just over 37 million tonnes.

Statements that have appeared in the media about a fuel shortage resulting from the launch of the Yug products pipeline are not only false, but downright stupid. The volume of diesel exports from the port of Novorossiysk has not changed significantly since the pipeline was put into operation.

Diesel fuel transshipment volumes at the terminals of Novorossiysk Commercial Sea Port:

  • 2015 – 8.0 million tonnes;
  • 2016 – 7.8 million tonnes;
  • 2017 – 8.5 million tonnes;
  • 2018 – forecast  – 8.5 million tonnes.

The pipe replaced the delivery of fuel by rail, making transportation cheaper and environmentally friendly, reducing the volume of dangerous goods transported through populated areas of the Southern Federal District and relieving the capacity of the North Caucasus Railway for passenger transportation. The main condition for starting exports via the pipeline was modernisation of the connected refineries and their production of Euro 5-standard diesel. Private vertically integrated oil companies (particularly LUKOIL in Volgograd) have carried out the necessary restructuring of production. The so-called "non-governmental" company Rosneft, despite all the measures taken, has not yet begun upgrading the Samara cluster of refineries and, as a result, instead of high-quality diesel, it continues producing Euro 3-standard fuel and a large amount of fuel oil that is sent abroad for recycling.

Russian diesel fuel production dynamics in 2013-2017, million tonnes

The basis for the construction of the Yug project through reconstructing unloaded sections of the Tikhoretsk–Novorossiysk oil trunk pipelines and looping from Samara to Tikhoretsk was the Energy Strategy of Russia for the period up to 2030, approved by the order No. 1715-р of the Government of the Russian Federation dated November 13, 2009 and the General Scheme for the Development of the Oil Industry of the Russian Federation until 2020, approved on June 6, 2011 by the order of the Ministry of Energy of the Russian Federation (No.  212).

The resource base of the Yug project, in addition to Volgograd Refinery and the aforementioned Samara cluster of refineries, may include the Ufa refineries, Orsk Refinery and Gazprom Neftekhim-Salavat. Also exported through Transneft’s infrastructure in Novorossiysk are resources of the Southern cluster of refineries that are not part of the vertically integrated oil companies system but that also produce diesel in excess.

Diesel fuel production forecast, thousand tonnes

Another reason why a volume of high-sulfur diesel fuel is exported by the southern refineries is the existing legislative restrictions on its trade in the domestic market of the Russian Federation. In a long-term forecast, a transition to the production of low-sulfur diesel fuel and its significant growth is expected.

Thanks to this petroleum products pipeline, a large number of Russian refineries now have the opportunity to diversify export routes. However, the self-professed expert Tankayev, who prepared the publication materials, slyly omits all of the above.

The materials suggest that increases in fuel prices depend on the producer (a private one or a company having a share of state ownership). But, as analysis of the price dynamics for this spring shows, their growth is at a faster pace at Rosneft, which those such as Tankayev set as an example for some reason (apparently not having fully understood the situation).

Diesel fuel price increase in spring 2018, RUB/tonne

Transneft Press Service directs mass media’s attention to the fact that the level of social responsibility is usually very low among such experts as Tankayev and newspapers' economising on pay is in fact compensated for such experts many times over by payments from those ordering the publication of materials. To quote Karl Marx, "[with a profit of] 300 per cent., … there is not a crime at which it will scruple, nor a risk it will not run, even to the chance of its owner being hanged". However, the newspaper itself inevitably devalues in the eyes of readers.

Today, the Nezavisimaya Gazeta newspaper has fallen victim to such economising, having published Tankayev's text. Hiding behind respected organisations’ names, such as InfoTEK and the Chamber of Commerce and Industry of the Russian Federation Committee on Energy Strategy and Development Of The Fuel And Energy Sector, Tankayev published materials about the state oil transportation monopoly Transneft that are not just incorrect but actually fabricated.

Trying to look clever, Tankayev reaches a contradiction between the beginning and the conclusion of every point he makes. Apparently, the article was written by him either at the height of a flu epidemic, or after receiving an advance from his customer. He tried so hard that he became like a character from Pushkin's Tale of the Priest and of His Workman Balda.

Especially noteworthy is his moaning about a threat to the existence of some independent producers due to a diesel deficit. The wording, even for a self-professed expert, is ridiculous, since the expert community has long unambiguously understood that the notorious "teapot refineries" are not able to produce a single gram of high-quality diesel.

Transneft Press Service is not surprised by the unscrupulousness of the newspaper's editorial staff, who have repeatedly tried to publish false information about the Company. But what is surprising is that some respected organisations not only continue to cooperate with such experts, but also give them the opportunity to make statements under the guise of the names of these organisations.

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