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Russian oil producers slightly reduce gas flaring in 2020

April 12/2021

MOSCOW (MRC) -- Russian oil producers reduced gas flaring only slightly last year and failed to reach a targeted level by a large margin, hampered by a lack of necessary infrastructure at new oilfields, a draft government document seen by Reuters showed.

Flaring, or the combustion of gas generated by various processes in the oil industry, generates carbon dioxide emissions.

Climate change poses a series challenge for Russia, with the economy heavily reliant on oil and gas production, as well as mining, and the government is under pressure to cut emissions.

The draft document, outlining oil industry developments until 2035, showed that the utilisation of the associated petroleum gas (APG) oil companies produce as a byproduct of crude extraction, rose to 82.6% in 2020 from 81.5% in the previous year - well below the 95% target which was expected to be achieved in the mid-2010s.

The document cites lack of infrastructure needed to transport and utilise APG, as well as a number of incidents at refining facilities as the main reasons for the high level of gas flaring.

The rate of APG utilisation in Russia rose to 88.2% in 2015 from 76.2% in 2013 but has declined since then, according to the document.

The World Bank found Russia, Iraq, the United States, and Iran accounted for 45% of all global gas flaring in 2017-2019. Gas flaring rates dipped across most of the top 30 gas flaring countries in early 2020 due to the pandemic.

The Russian document shows Surgutneftegaz had the most success in containing gas flaring, with its APG utilsation rate rising to 99.5% last year. At Russian gas giant Gazprom , it stood at 98.9%, but was just 73.1% at energy major Rosneft.

Russian APG utilisation rose to 94.7 billion cubic metres (bcm) overall in 2020 from 94.1 bcm in 2019. The rest was flared into the atmosphere.

As MRC informed earlier, COVID-19 outbreak has led to an unprecedented decline in demand affecting all sections of the Russian economy, which has impacted the demand for petrochemicals in the short-term. However, the pandemic triggered an increase in the demand for polymers in food packaging, and cleaning and hygiene products, according to GlobalData, a leading data and analytics company. With Russian petrochemical companies having the advantage of access to low-cost feedstock, and proximity to demand-rich Asian (primarily China) and European markets for the supply of petrochemical products, these companies appear to be well-positioned to derive full benefits from an improving market environment and global economy post-COVID-19, says GlobalData.

We remind that in December 2020, Sibur, Gazprom Neft, and Uzbekneftegaz agreed to cooperate on potential investments in Uzbekistan including a major expansion of Uzbekneftegazs existing Shurtan Gas Chemical Complex (SGCC) and the proposed construction of a new gas chemicals facility. The signed cooperation agreement for the projects includes the creation of a gas chemical complex using methanol-to-olefins (MTO) technology, and the expansion of the production capacity of the Shurtan Gas Chemical Complex.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 241,030 tonnes in January 2021 versus 217,890 tonnes a year earlier. Only shipments of low density polyethylene (LDPE) and high density polyethylene (HDPE) increased. At the same time, PP shipments to the Russian market reached 141,870 tonnes in January 2021 versus 123,520 tonnes a year earlier. Supply of homopolymer PP and PP block copolymers increased.
Author:Margaret Volkova
Tags:PP, PE, crude and gaz condensate, PP block copolymer, homopolymer PP, propylene, LDPE, HDPE, ethylene, gas processing, petrochemistry, Gazprom, Gazprom neft, Rosneft, Sibur Holding, Surgutneftegaz, Shurtans Gas-Chemical Plant, Iraq, Russia, USA, Uzbekistan.
Category:General News
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