The Nizhny Novgorod Oil Refinery is one of the largest oil refineries in Russia, located in the town of Kstovo in Nizhny Novgorod Region. It was built in the early 1950s under the name Novogorkovsky Oil Refinery; its construction was the main reason for the emergence and growth of Kstovo itself, which received town status in 1957. The enterprise is owned by the company Lukoil.[1]

Production and Capacity

The refinery specializes in processing petroleum fractions into high-octane gasoline and diesel fuel. Catalytic cracking units play the key role in this process. One of the two such units was commissioned in 2010; its design capacity is 1.4 million tons of Euro-5 standard gasoline per year, and its construction cost was estimated at 30 billion rubles (about one billion dollars at the exchange rate of the time). The enterprise plays an important role in supplying fuel to the Moscow region, which accounts for about 30 percent of the country's gasoline consumption.[1]

The 2024 Breakdown and the Effects of Sanctions

In early January 2024, one of the refinery's two catalytic cracking units went out of service. The cause was the failure of foreign-made compressor equipment, for which no replacement could be found because of the Western sanctions imposed on Russia. As a result, the refinery halved its gasoline production. According to the newspaper Kommersant, this breakdown was the first known case in which a shortage of imported equipment caused by sanctions could lead to a long-term shutdown of production at a major Russian refinery.[1]

Beginning January 10, 2024, Lukoil stopped selling AI-95 gasoline on the commodity exchange — presumably in order to supply fuel to its own network of filling stations. At the time the reports of the breakdown were published, this had no significant effect on retail prices, since winter is a period of low demand for gasoline.[1]

Links

Sources

  1. idelreal.org — Lukoil's Nizhny Novgorod Plant Halves Gasoline Production Due to Western Sanctions (archive)