Russia's Tuapse oil refinery remains idle after May 17 drone attack
MOSCOW (Reuters)—Rosneft's Black Sea oil refinery in Tuapse may remain idle until at least mid-June, despite being repaired after a May 17 drone attack, due to low profitability.
The plant is technically ready to resume oil processing after an emergency shutdown triggered by the Ukrainian drone attack, but will remain idle amid low profitability for exports of refined fuels compared to crude.
"It's not profitable to refine oil. It's not interesting to ship products. At the moment, it's more efficient to export crude," one of the sources said. Rosneft did not immediately reply to a request for comment.
"The plant was fixed (after fire), the damage was minor, but refining has not been resumed. We hear that Rosneft was seeking price increases from its (petroleum products) buyers. The plant does not start operations, while negotiations are ongoing," another industry source said.
The export-oriented Tuapse plant produces naphtha, fuel oil, vacuum gasoil and high-sulfur diesel, mainly supplying Turkey, China, Malaysia and Singapore. It supplies almost no gasoline and low-sulfur diesel to Russia's domestic market.
Tuapse's only crude distillation unit (CDU) was shut down on May 17 after the drone attack, although it was not damaged and could be fully operational, a third source said.
Security concerns are an additional reason to keep the plant idle while refinery margins remain weak, a fourth source said. Attacks are likely to be less damaging for plants that are offline, that source added.
The Tuapse plant, which has processing capacity of 240,000 bpd of oil, was also struck by a drone in January and resumed work by around the end of April, industry sources said.
In 2023, the plant processed 9.322 metric MMtpy of crude oil, producing 3.306 MMt of gasoil and 3.123 MMt of fuel oil.
(Reporting by Reuters; Editing by Mark Potter)
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