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Lukoil is “choking” with fuel oil: plants are on the verge of shutdown
Lukoil is “choking” with fuel oil: plants are on the verge of shutdown
Lukoil company has warned the authorities about the possible termination of the work of its oil refineries (refineries). The corresponding letter was sent by the beneficiary of the organization Vagit Alikperov to the Deputy Prime Minister Alexander Novak on March 25, 2022. The reason was Western sanctions, which led to a significant decrease in the volume of shipped fuel oil.
According to Kommersant, the fuel storage facilities of Lukoil plants are overfilled. The volume of exported fuel oil decreased by 1.5 times compared to February. At the same time, not all tanks of tank farms and refineries allow storing this by-product of oil refining. If urgent measures are not taken, refineries may suspend their work, since there will simply be nowhere to store the fuel oil.
The company's management suggests that the authorities begin to actively use fuel oil in the operation of the CHP plants as fuel.
It is known that such a practice exists in a situation where CHP plants experience a shortage of gas, a cheaper type of fuel. In 2020, only 2% of the fuel consumed by CHP plants was fuel oil. Its volume then amounted to about 5.85 million tons.
Several circumstances prevent the government from the immediate acceptance of Alikperov's proposal. First of all, the problem arises with the negative environmental impact (NEI). The company pays environmental contributions for NEI to the regional budget. In the event that the use of fuel oil at the thermal power plants is significantly increased, deductions to the regional treasury should increase as well.
At the same time, the management of Lukoil proposes to temporarily stop the practice of charging multiplying coefficients of 25 and 100 to the existing rates of VAT payment. The same applies to the flaring of APG (associated petroleum gas) in case of exceeding the existing standards.
Foreign buyers also began to refuse to buy APG, and the regulatory framework does not allow burning more than 5% of APG.
It is assumed that the gas should be used with benefit for processing (as a feedstock in the production of liquefied gas) or injected into the reservoirs.
So far, the Ministry of Natural Resources is against Lukoil's proposal. They believe that the regional budgets in this case will be without the money necessary to solve environmental problems. The ministry suggests refineries to recalculate gross emissions, which will lead to an increase in the fee for NEI, but will allow not to apply multiplying factors within the recalculated quotas.
According to the federal publications, Russia found itself in a situation of choice. The authorities can "rescue" Lukoil's plants by reducing the fees charged for harmful emissions from APG flaring and, at the same time, increasing their volume. Otherwise, the work of enterprises may be suspended, and the domestic market of the country will experience a shortage of fuel during the period of active harvesting.
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