Tatarstan petrochemists put up fight against pandemic and prepare for falling volumes
Production grows, price decreases
During the first quarter of 2020, enterprises of the Tatarstan petrochemical complex have augmented production by 8% compared to the same period in 2019 (dynamics of production of oil products and plastic has turned out to be positive, production of chemicals and oil production has decreased). But the value of products sold year on year has been lower by 5% — 425 billion rubles.
Even though it became possible to succeed in the first quarter, the production volume is expected to inevitably reduce by the end of the year. This happens because many consuming sectors have suspended operation, which means that there is a problem with sales. For instance, the number of air flights has collapsed, consequently, the load of oil refineries has significantly dropped. Moreover, the coronavirus pandemic has limited logistics — both domestic and for exports and imports. Director General of Tatneftekhiminvest-holding PJSC Rafinat Yarullin said about this at a meeting of the holding’s board of directors chaired by Rustam Minnikhanov.
The fall in oil prices, which happened because of the initial breach of the OPEC+ agreement on organised production cut by exporters, is the second factor of pressure on the activity of the republic’s oil, gas and chemical complex. Though the exporters agreed on a gradual production cut on 12 April, this didn’t help to cover the oil surplus. The reserves are full, we can’t wait for a demand recovery unless the quarantine is over. This made a lot of companies of the complex announce a reduction in operational and investment costs by 20-30% compared to initial plans for 2020.
“The depth of the fall isn’t clear yet”
Russia will reduce production to 8 million barrels a day. This is why it will be necessary to redistribute quotas between Russian oil producing companies. For instance, Tatneft announced that it would reorient investments in oil refining and petrochemistry.
At the same time, the amount of oil refining rose by 20% in the republic in the first quarter. Production volume increased by 6,3% at TAIF-NK, a heavy coker gas oil hydrotreating unit was put into operation at TANECO.
Rustam Minnikhanov heard Rafinat Yarullin out who enumerated measures that were necessary to support the economy at federal level. The president agreed that the situation was uneasy and it was necessary to understand the anti-crisis plan.
He said: “There will be a fall, but its depth isn’t clear yet, this is why we should make decisions manually”. For instance, Minnikhanov offered to support oil servicing companies whose orders had suddenly gone down at the moment. He recommended them to save the staff of qualified workers. So Nail Maganov, director general of Tatneft, was recommended to temporarily retrain the workforce that was free because of the downtime to build facilities and for other auxiliary spheres.
Pandemic “aroma”: urgent retraining during coronavirus
To meet the surged demand for antiseptics, masks and other goods that are popular because of the coronavirus, many companies of the petrochemical complex urgently arranged production of new types of products. Rafinat Yarullin said at the meeting that Nizhnekamskneftekhim, Tatneft, KAMAZ, Tatelektromash were especially active there.
Production growth was noted at Tatkhimfarmpreparaty. A big growth began at Aromat factory, which makes disinfectants. Polymatiz and Elastic factories make nonwoven fabric for medical purposes (Editor’s Note: while Polymatiz has recently begun making medical masks from its fabric). KVART quickly mastered the production of cord for masks, while production volumes of disinfecting recirculators increased at POZIS.
But new measures need to be taken. Rafinat Yarullin noted that China used chlorine dioxide to disinfect streets and facilities. It isn’t made in Russia yet, which means it is necessary to consider the possibility of arranging this process in Tatarstan. Yarullin also thinks that it is important to organise the production of multiple-use respirators in the republic, increase the production of ethanol and isopropyl alcohol. However, the production of antiseptics is facing a problem: the production of disinfectants packed in containers over 100 ml is imposed excises and requires a special permit. This is why Yarullin offered to free manufacturers of alcohol-based antiseptics in big containers from excises.