Russia does not need to ban diesel exports to combat rising prices and possible fuel shortages after Ukrainian drone attacks led to the reduction of oil refining capacity, Deputy Prime Minister Oleksandr Novak said on Friday, News.ro reported from with reference to Reuters.

Speaking to reporters, Novak also said, without elaborating, that the Novatek-led Arctic LNG 2 project, which began preliminary production in December, was continuing negotiations to supply liquefied natural gas (LNG) as Western sanctions prevented the availability of tanks needed for the project. .

Russia has faced a sharp reduction in oil refining capacity, crippled by technical failures and drone attacks.

14% of the total oil refining capacity suffered from Ukrainian attacks

The government banned the export of gasoline for six months, starting on March 1.

According to Reuters estimates, the share of oil refining capacity closed by drone strikes has reached 14 percent of Russia’s total oil refining capacity.

Total daily decommissioned primary oil refining capacity rose by about a third in March from February to 4.079 million metric tons.

Novak said other refineries have been able to ramp up production while the government works on fuel supplies from refineries amid the rail blockade.

“The situation on the oil products market is stable today. Our enterprises have already increased the load to the available capacities. This made it possible to increase the supply, including… gasoline and diesel,” Novak said.

Speaking about the technical failure at the Norsi refinery, Russia’s fourth-largest oil refinery, Novak said the faulty turbine could resume operation in a month or two.

Industry sources said one of the two catalytic cracking units remains non-functional at the Norski refinery.

ARCTIC LNG 2

Commenting on Arctic LNG 2, which is a key element of Russia’s plans to capture a fifth of the world’s liquefied natural gas market by 2030-2035, Novak said Novatek was in talks to deliver the cargo.

The company initially said commercial LNG deliveries from the project should begin in the first quarter of 2024. However, Washington imposed sanctions on the project in November, which followed separate measures related to the project in September due to Russia’s conflict with Ukraine.

The project also aims to ensure the safety of gas carriers. Fearing a backlash from sanctions, foreign shareholders suspended their participation in the project, reneging on financing commitments and contracts to purchase the plant.

Responding to a question about when the first batch of LNG from the project will be delivered, Novak said that “the company is dealing with the issues, relevant discussions are underway.”

“Their main problem is tanks,” he added. (News.ro)