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Import Substitution: Transneft Switches to Domestic Additives

Date of publication: 25 September 2019 Printable version

At the launch of a drag-reducing agents production plant (left to right): Prime Minister of the Republic of Tatarstan Aleksey Pesoshin, organic chemistry division professor at Moscow Lomonosov State University Ilya Nifantyev, Vice President of the Russian Academy of Sciences and Director of the Institute of Organic Synthesis of RAS Urals Valery Charushin, President of Transneft Nikolay Tokarev, Deputy Minster of Energy of Russia Pavel Sorokin, Managing Partner of Nika-Petrotech Aleksey Balashov

On Saturday, 21 September, Transneft Synthesis plant set to produce drag-reducing agents was launched in Tatarstan. The plant is located in the Alabuga special economic zone. Among the participants of the opening ceremony were President of Transneft Nikolay Tokarev, Prime Minister of the Republic of Tatarstan Aleksey Pesoshin and Deputy Minster of Energy of Russia Pavel Sorokin.

Will Withstand Any Competition

Until recently, Russia has not had its own full-cycle production of specialised drag-reducing agents for pipeline transportation of oil and petroleum products. As a consequence, dozens of companies were forced to purchase those from foreign suppliers. In 2014, however, Transneft initiated research into creating a technology for the production of drag-reducing agents (DRA) within an import substitution programme.

Modern DRAs are a high molecular weight hydrocarbon polymer solution or suspension in a solvent. These allow to reduce turbulence inside a pipeline, which in turn increases its delivery capacity. Beyond that, agent use promotes lower energy consumption in pumping stations as well as increased operational reliability of the trunk pipeline.

Two years later, Transneft Synthesis was created for the purposes of bringing the technology to life, and on 01 July 2017, construction of the plant began, which was completed this April. About RUB 2.7 billion were invested into the project.

“The agent increases transportation efficiency by reducing resistance, it lowers energy consumption and promotes increased delivery capacity of the pipeline, not hypothetically, but realistically, as high as by 30%. So, in effect, this is an alternative to building new oil pumping stations. It is reliable at lower temperatures, something American agents can not fully provide,” Transneft President Nikolay Tokarev commented.

Transneft's savings from in-house production will amount to RUB 100 to 250 million, depending on DRA consumption as per the plan for oil and petroleum products commodity flows.

Region’s Strategic Partner

“Russia’s oil and gas sector is gigantic, it secures trillions of roubles in investment, annually. Considerable portion of these funds goes to our foreign partners. But the endeavours undertaken by Transneft and the government of the Republic of Tatarstan secure jobs for Russian citizens, research institutions and domestic companies, by providing platforms, preferences and the necessary infrastructure. It is this work that allows us to channel funds into the country’s economy,” remarked Deputy Minister of Energy of Russia Pavel Sorokin. 

168 new jobs were created at the plant. This will provide people with employment as well as secure new tax revenues for budgets at all levels.

Transneft is not only launching its own production, is also actively collaborating with local businesses. In 2018, more than 500 businesses in the Republic of Tatarstan were contracted by the Company to the effect of RUB 19.524 billion, and RUB 14.897 billion in 2019.

The Republic’s Prime Minister Aleksey Pesoshin has noted that Transneft is a strategic partner of the Republic of Tatarstan. The relationship has been developing systematically for a long time now, as part of a mutual collaboration agreement. According to Pesoshin, the new plant will not only cover Transneft’s needs in drag-reducing agents, but also in part those of other companies that have their own petroleum products pipelines.

Escaping Dependency

Dependence of companies in Russia’s fuel and energy sector on western suppliers of technology and equipment has remained high despite the fact that the introduction of sanctions has limited Russian companies’ capability to acquire foreign technology and equipment. Minister of Industry and Trade of Russia Denis Manturov has previously stated that by 2020 the share of imports in the Russian FES will have been reduced to 40%.

According to Russia’s FES experts, Transneft’s agent has considerable advantages over the American one and is 35 to 40% cheaper.

Next year, the share of imports acquired by Transneft will be a mere 3%. During the last three years, new production capacities have been launched: the plants Transneft Oil Pumps and Russian Electric Motors in Chelyabinsk, a modern production complex based at the Tyumen Machinery and Repair Plant. Construction of these facilities does not simply allow Transneft to satisfy its own needs but also to deliver its products to other companies in Russia’s fuel and energy complex. In prospect, there are plans for entry into foreign markets.

As for the Transneft Synthesis project, it is much more than merely a chemical technology. It is a synergy of advanced knowledge, innovative solutions and human labour. Scientists, designers, engineers, mechanics, chemists and power engineers have contributed their knowledge and experience to the creation of an innovative technological complex, thus securing efficient and safe operation of a modern production facility.

Transneft, the world’s largest oil pipeline company, has been efficiently carrying out the country’s government assignments, implementing its own import substitution programme, investing funds into developing domestic production and creating additional jobs in the regions of its operation, thus contributing substantially to Russia’s economy.

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