Events

Conference: Rail Deliveries of Petroleum and Gas Refined Products

Date: June 17, 2016

Conference: Rail Deliveries of Petroleum and Gas Refined Products June 17, 2016

Key trends in oil & gas refined products rail transportation market, new infrastructure-oriented projects, issues of the quality and safety of transportation, market development projections. MAXConference has held the 7th international conference ‘Rail Deliveries of Petroleum and Gas Refined Products’. Over 100 delegates from Russia, Kazakhstan, Mongolia, Bulgaria, Estonia, Latvia, and Belarus took part in the discussion.

Тhe conference was opened by Alexander Sapronov, Executive Director at Freight One. In his address, he mentioned that liquid bulk cargo volumes will continue shrinking and the rolling-stock size — decreasing. Besides, Russian rail carriers will face a heavy competition with pipeline transporters of oil products. Mr Sapronov paid special attention to the situation when ‘the number of players in the market has shrunk, and major companies only have been able to maintain their position, whereas the rest will have to learn to operate at a very low cost level’. That’s why today the main objective is to seek opportunities in the new relationship system that’s being built in the market.

One of the key speakers, Anatoly Kuzhel, Deputy Head of Central Traffic Management Direction at Russian Railways said that the main objective for the company is ‘to improve operating efficiency and reduce costs. Oil product market should not be observed separately from the transportation market on the whole. Besides Russian Railways still has to “debottleneck” its infrastructure. This issue has drawn attention of many participants of the conference.

Alevtina Kirillova, Advisor to the Head of the Ministry of Transport of the Russian Federation, said that all market participants should look for efficient ways of communication with each other in order to be able to develop their businesses,to improve their returns and minimize costs. In her opinion, ‘the new market trend enables the shift towards multi-sectorial cooperation, creation and development of transnational Production-Communication-Transportation-Distribution chain and calls for innovative solutions.

Elena Chernysheva, Head of the Innovative Research Sector at VNIPIneft, described the complicated situation concerning refinery upgrades. New plant commissioning pace has slowed down dramatically, last year. Instead of the 30 plants planned, only 14 were put in operation, and the commissioning of others has been postponed. In the meantime, in order to maintain profitability level, small and medium capacity refineries have started to increase their productivity extensively, build re-refining plants, i. e., for diesel fuel hydrotreatment or road bitumen production. Therefore, small refineries ‘grow big' and turn into large ones.

Needs of the companies in the LPG transportation market were the topic of the presentation delivered by Irina Agarkova, Senior Manager for Logistics Development at SIBUR. ‘We are now experiencing scarcity of terminal capacity, which could be used by our company for LPG transshipment. The optimal approach for us is to make a demand in the market and get the logistical capacity required. The company is ready to consider agreements with guaranteed supply volumes. SIBUR long-term plan is to establish LPG supply to the markets of China, Japan, South Korea, and other Asian countries.

The most heavily debated issue was the technology applied for oil products transportation. Conference participants shared their experiences on how to negotiate the provision of transport, and who is to be responsible for it: consignor or consignee; both in stock-based transactions and off-exchange-deals. Participants were interested in how exchange trade rules correlate with railroad transportation processes. Lots of questions were raised in regards to the delays in shipments in exchange-traded contracts, and the absence of documents that could protect both the buyer and the seller.

Sofia Katkova, Project Manager at Morstroytekhnologia, shared her views on the development of sea ports, terminals and their access routes in the Arctic region. The speaker pointed out that the current transport sector of Yamal and the Gulf of Ob is experiencing a real investment boom.

The statement regarding the Gulf of Ob was supported by Alexander Skuratov, Advisor to the CEO of SG-Trans. According to Skuratov liquefied gas production will be increased and shifted to Siberia, namely to the Gulf of Ob. Transport corridors will be transformed, haul length will be increased. Gas price has dropped, while its transportation component has augmented. The speaker invited Russian Railways to deal with this issue and pay closer attention to it.

Participants also discussed the changing of export flows and appearance of new projects/directions regarding the development of bitumen terminals in Russia, LPG supply chains, and the prospects of petroleum product exports via sea ports, as well as the issues of quality, operation safety and fleet stock (tanks and containers) maintenance.

Conference guests included representatives of refineries, petrochemical companies, Ministry of Transport of the Russian Federation, fleet stock operators, petroleum product traders, railway car production/repair facilities, railroad administration.

We would like to express our gratitude to our conference partner: Lester IT

We would also like to extend our gratitude to the speakers, moderators, and experts from Russian Railways, the Institute of National Monopoly Research, LPG Moravia S.E, Thomson Reuters, SIBUR, TA BITUM, Petroleum Trading, MOBOIL, SPIMEX, the Institute of Transport Economy and Development, Direction of Public Customer’s Sea Transport Development Program, Altaivagon, SG-Trans, Federal Agency for Railroad Transport Supervision, Spetstransgarant, Petrolsib-Service, ISR Trans.

We would like to invite all participants to further cooperation! Please contact us by phone +7(495) 775-07-40 or e-mail info@maxconf.ru.

You can enjoy photos from the conference on our Facebook profile.

Participants’ opinions:

Anatoly Kuzhel, Deputy Head of Central Traffic Management Direction at Russian Railways: ‘I would like to thank the organizers of the conference for the invitation and for the opportunity to share the information on what the situation is like in the Russian railway market. This conference is of great importance, because it provide a picture of what is going on in the oil product transportation market, and based on the opinions exchanged, develop a tactic and a strategy for the near future.’

Alevtina Kirillova, Advisor to the Minister of Transport of the Russian Federation: ‘Let me express my gratitude to the organizers of the conference, it is the 7th one. Here we can discuss current problems of oil product transportation market; and I can tell you that participating in this event actually brings its results.’

Irina Agarkova, Senior Manager of Logistics Development at SIBUR: ‘Thank you for organizing the event, no doubt the new information and contacts will be useful for our company’.