Key events
Decree No. 358, «On improving the reliability of power supply,» has been signed. The document outlines the construction of a 330 kV high-voltage line between Mozyr, Petrikov, and Mikashevichi, along with the modernization of two 330 kV substations, «Mozyr» and «Mikashevichi,» in the Gomel and Brest regions. This decision was made in response to power outages caused by the storm in the Gomel region in July. Notably, the decree doesn’t focus on enhancing overall reliability but rather facilitates the construction of this specific line, bypassing environmental regulations. This includes proceeding without public consultations, compensatory planting, or limitations on the use of protected natural areas.
The scheduled shutdown repairs at OJSC Naftan have been completed. During August-September 2024, maintenance was carried out on the delayed coking unit, the elemental sulfur production unit (Claus), and Hydrogen Production Unit No. 2.
The construction of boiler houses is ongoing in the village of Oktyabrsky, Smolevichi district (10 MW using milled peat), and in the urban settlement of Smilovichi, Cherven district (5 MW using wood chips).
By Resolution No. 636 of the Council of Ministers, dated August 30, 2024, adjustments were made to the export duty rates on oil and oil products in Belarus, effective from September 1. According to the document, the export duty rates for crude oil, straight-run gasoline, propylene trimers and tetramers, light and medium distillates, diesel fuel, commercial gasoline, gasoline, toluene, xylenes, fuel oil, lubricating oils, used oil products, petroleum jelly, paraffin, petroleum coke, and petroleum bitumen have been set at $0 per ton. The export customs duty for liquefied hydrocarbon gases is set at $20.8 per ton, and for ethane, butane, and isobutane, at $18.7 per ton.
A quartz quarry has been opened, enabling the use of domestic quartz as a proppant in hydraulic fracturing. This will help reduce imports and mitigate the risk of sanctions in this sector.
Belarusneft has published its key performance indicators for January-August 2024. Seismic exploration covered 506 sq. km in the Maisko-Makeevsko-Dneprovskaya area, a new exploration zone with a total area of 1,256 sq. km. Three oil deposits were discovered: the Riphean complex at the Yuzhno-Ostashkovichskoye field, the Petrikovsko-Eletsky horizons at the Severo-Domanovichskoye field, and the Sargaevsky horizon in the western block of the Beskopylnovskoye field. Oil reserve growth amounted to 1.314 million tons, with oil production reaching 1.273 million tons. A total of 47 wells were completed, and 70 hydraulic fracturing operations were conducted per month.
A new electric machine for Grodno CHPP-2 was manufactured in Novosibirsk as part of a modernization project that began in 2019. The project involved replacing the turbogenerator, excitation system, relay protection, generator automation, and installing a monitoring system for the brush-contact apparatus, along with several other critical components. The new air-cooled turbogenerator will replace the outdated hydrogen-cooled unit, significantly improving efficiency and reliability.
Statistics and data
The volumes of oil product deliveries to the Russian market and transit through Russia to other countries have been revealed. A detailed analysis of the data is discussed in the main topic of this issue.
A forecast has emerged regarding plans to produce over 2 million tons of oil in 2025, and these plans appear quite realistic. In 2023, production volume reached nearly 1,900 thousand tons. The current levels of exploration and drilling suggest that oil production is expected to increase.
Results of Energy-Saving Activities for January-June 2024:
- Fuel and energy resource savings amounted to 362.3 thousand tons of coal equivalent, compared to the target of 485 thousand tons set by the State Program for 2024.
- The target for the share of local fuel and energy resources (excluding nuclear energy) in the gross consumption of local fuel and energy resources was 16.0%, which aligns with the annual goal of 16.0%.
- The target for the share of renewable energy sources in the gross consumption of fuel and energy resources was 7.0%, while the goal for 2024 is set at 7.6%.
In the first eight months of 2024, the Belarusian NPP generated 11.8 TWh of electricity, matching the total production of the entire previous year. The capacity factor stands at 0.85%.
By 2026, approximately 700,000 electronic meters will be integrated into the automated system for monitoring and accounting of electric energy («ASKUE-byt») in the Gomel region. The program for creating «ASKUE-byt» in the housing stock of the Gomel region is set for 2021-2025. All induction meters replaced by electronic ones between 2015 and 2023 will be consolidated into this unified system.
Statements
“Initial data is being collected, and a site for the construction of this plant is being selected,” stated newly appointed Energy Minister Alexei Kushnarenko. The investments will come from Gazprom. Unexpectedly, they announced the construction of an LNG plant in Belarus, following an agreement signed last year. To circumvent local laws, the facility will be built within the Great Stone Industrial Park, which, in violation of the constitution, is allowed to apply the laws of other countries, such as China. Gazprom will be responsible for the construction.
This announcement raises questions since Belarus does not produce gas and lacks a sales market. The high level of gasification diminishes the likelihood of supplying gas to the population or industry. Freight transport has been identified as the primary consumer, but it was noted that MAZ and BelAZ have only just begun developing suitable trucks. It appears that, realizing the futility of the Power of Siberia-2 project, Gazprom is willing to build anything, anywhere, regardless of future economic viability. The only reassurance is that Gazprom will cover the plant’s construction costs.
Even Deputy Minister Denis Moroz found himself at a dead end and at a joint meeting of the commissions of the Parliamentary Assembly of the Union State he said: «But a choice of this kind must be approached in a balanced manner.»
«After the commissioning of the nuclear power plant, we have a number of state programs, regulatory and legal acts are being adopted aimed at stimulating an increase in electricity consumption in the country. And one of the significant areas in this work is precisely the development of electric transport, which is certainly a competitor for gas-powered vehicles,» noted the Deputy Minister.
Topic of the Issue: Oil products trading
Some data on the volume of oil product exports from Belarus in August and July has been revealed. This issue will analyze the data, focusing on the primary oil products: gasoline, diesel, and fuel oil.
From January to August, a total of 3.24 million tons of oil products (gasoline and fuel oil) were exported through Russian ports, with no diesel being exported during this period. While we do not have specific information about heavy oil supplies to Russia, it is likely that Belarus does not supply heavy oil to the country, given the structure and production of oil products. This assumption is further supported by the volume of fuel oil exports to third countries, which is nearly equal to gasoline exports. Notably, the yield of fuel oil is currently estimated to be around 10%, whereas gasoline yield typically exceeds 20% of a ton of oil.
In July, Belarus exported a total of 404 thousand tons of oil products, while in August, the figure dropped to 254 thousand tons. Exports to third countries via Russian ports averaged 405 thousand tons from the beginning of the year through the end of August. Considering the known export volumes for July and August, it can be inferred that an average of 445 thousand tons were exported through these ports during the period from January to June.
Thus, the dynamics of exports through Russian ports to third countries is as follows:
- January-June 2024: an average of 445 thousand tons
- July: 347.6 thousand tons
- August: 223 thousand tons
The volume of exports to Russia was 56.5 thousand tons in July and 31 thousand tons in August. Consequently, the total export volumes to Russia and third countries amounted to 404 thousand tons in July and 254 thousand tons in August. Comparing this with oil imports in 2023, estimated at 14 million tons, we project exports to be around 600 thousand tons per month.
An analysis of monthly exports of petroleum products, using 2019 as a reference year (the last year with a complete data set), indicates that exports do not exhibit pronounced seasonal fluctuations. In 2024, petroleum product exports remain, on average, a third lower than the previous year, with negative trends observed in recent months.
It’s important to note that large-scale repair work was conducted at Naftan in September, and the Mozyr Oil Refinery experienced an emergency shutdown in July and August. This suggests that export volumes are likely to recover in October.
Given the current supply volumes, even without any new emergencies, export volumes in 2024 are expected to decrease significantly. With the present level of exports, we anticipate a refining capacity of around 11 million tons.
Additionally, several other publications have reported on the state of the oil refining industry in Belarus. The Mozyr Oil Refinery was shut down following a hurricane in July, resulting in estimated damages of $30-35 million and a reduction in production by three times, bringing output down to 11 thousand tons of products per day. According to the Flagshtok publication, the company’s losses in May alone reached 250 million rubles (approximately $76.3 million).
