Oil and oil-products

Along with natural gas, Gazprom Export sells oil, petroleum products, liquefied gas, sulfur, and a wide range of petrochemical products in foreign markets.

 

CURRENT AREAS OF ACTIVITY

In 2016, Gazprom Export exported around 5.6 million tons of liquid hydrocarbon products and refined products, to a total value of around $1 billion. The commodities were sold under commission contracts with Gazprom PJSC, Company subsidiaries and independent producers on various delivery terms (FCA, FOB, CPT).

Gazprom Export’s product portfolio in 2016 covered a broad range of goods, including crude oil, gas condensate, gas-derived sulfur, fuel oil and gas condensate distillate, liquefied petroleum gas (LPG) and small-scale LNG (ssLNG), alcohols, helium (gaseous and liquefied), and carbon black. The main producers of the products are the Astrakhan gas refinery, the Orenburg gas refinery, the Surgut CSP, the Urengoy CTPP, the Sosnogorsk gas refinery and the Salavatsky oil refinery.

In 2016, total product supply volume was comparable to the level of previous periods. For the purposes of maintaining sales revenue against a volatile market backdrop, the Company has taken steps to improve the efficiency of export supplies, including cost cutting with respect to transportation, transshipment and survey services, by optimizing its sales channels and consolidating export flows.

Petroleum products and stable gas condensate (SGC)

In 2016, Gazprom Export implemented the export sale of roughly 2.5 million tons of petroleum products and SGC. The volume of exported products held stable year-on-year. The main supply directions were Central, Western and Southern Europe, East Asia and the Republic of Kazakhstan. The supply volume of Gazprom Neftekhim Salavat LLC products doubled (from 290,000 t in 2015 to 580,000 t in 2016), while product share in the Company’s portfolio climbed to 24%.

Sulfur

Around 2.8 million tons of sulfur (gas-derived, technical, granulated) were exported in 2016.

Despite unfavorable conditions on the world sulfur market, and against a backdrop of excess sulfur supply originating from alternative sources, in 2016 the Company managed to maintain Gazprom Group’s traditional markets in the far abroad (Morocco, Tunisia, Brazil, Israel and Lebanon) and supply the commodity to primary consumers while minimizing the impact of adverse factors.

Liquefied petroleum gas

In 2016, the Company exported liquefied petroleum gas produced by Gazprom Pererabotka and Gazprom Dobycha Orenburg to countries in Central and South-Eastern Europe, as well as to CIS countries. Exports of around 300,000 tons a year are shipped by rail and sea under medium- and long-term contracts.

Despite the significant market decline, as well as the unfavorable global conditions, in 2016 the Company managed to maintain the primary consumers of the commodity in Poland, Hungary, Bulgaria and Ukraine — as well as market price level.

Oil and gas chemistry products

In 2016, export sales included 25,000 tons of technical carbon under a commission contract with Gazprom PJSC; 14,000 tons of petrochemicals under a commission contract with Gazprom Neftekhim Salavat; as well as gaseous and liquid helium and odorant.

The traditional sales markets for the petrochemicals sold by the Company for export are the countries of Eastern and Central Europe, the CIS and the Customs Union.

Activities under the European REACH Regulation

In 2016, Gazprom Export and its Special Representative in the EU, GM&T France, continued to work on supporting Gazprom Group products registered in compliance with the requirements of REACH/CLP Regulations.

Constant work is being done with respect to monitoring recent requirements of the applicable environmental legislation of the EU and other countries pertaining to chemical substances. The safety certificates for the products are being updated to ensure compliance with the latest requirements. To ensure the possible export of commodity items to the EU, new products are registered in a timely fashion.

 

FUTURE AREAS OF ACTIVITY

Eastern Gas Program

Gazprom’s plans for the Eastern Gas Program, besides its gas component as such, call for establishing a number of large-scale processing facilities in Eastern Siberia and the Russian Far East.

As East Siberian fields are developed, large-scale helium and LPG production projects will become a separate area of activity, with Gazprom Group becoming a major supplier of these products to Asia-Pacific Region markets.

The signing of the contract for pipeline gas supply to China was followed by the approval of a comprehensive Action Plan for creating gas production, transmission, and processing capacities using gas from fields in the Yakutsk gas production center. In accordance with this Action Plan, Gazprom Export and other Gazprom Group companies have been tasked with developing an optimal export model for helium and LPG exports and negotiating with potential clients.