Lukoil's Largest Refinery Has Shut Down

It ranks 4th in Russia in terms of capacity and 2nd in terms of gasoline production.

The Nizhegorodnefteorgsintez (NORS) oil refinery halted oil processing on July 2 following an attack by unmanned aerial vehicles (UAVs), two industry sources told Reuters.

Ranked fourth in Russia in terms of capacity and second in gasoline production, NORSY was attacked on Thursday. As a result, the plant—the largest among Lukoil’s refineries—suffered damage to its main AVT-6 primary processing unit, which accounted for 53% of the facility’s capacity, according to The Moscow Times.

Another unit—AVT-5, which accounts for 25% of the plant’s capacity—was put out of commission by a drone on June 24. Since Thursday, NORSI has suspended the sale of wholesale shipments of gasoline and diesel fuel on the St. Petersburg Commodity and Raw Materials Exchange, sources told Reuters.

Capable of refining 15 million metric tons of crude oil and producing 5 million metric tons of gasoline annually, NORSI became the fifth Russian refinery to halt production since early June. On June 16, Gazprom Neft’s Moscow refinery halted operations; according to Reuters sources, repairs there could last until 2027. Tatneft’s Taneco refinery in Nizhnekamsk has been idle since June 12; the Kuibyshev refinery halted operations on June 10, and the Volgograd refinery on June 1.

Since early March, Ukrainian drones have attacked Russian oil industry facilities at least 50 times. As a result, according to Energy Intelligence estimates, oil refining volumes in Russia plummeted by 25% year-over-year in June—to 3.91 million barrels per day, the lowest level in more than 20 years. Gasoline production fell by 17% year-over-year—to 850,000 barrels per day, which is significantly below domestic market demand.

It will most likely not be possible to increase the utilization rates of Russian refineries affected by drone strikes in the coming month, an oil industry source told Kommersant. According to the source, this month’s refining volumes will, “at best,” remain at June levels—and that is assuming there are no new attacks on refineries.

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