The Gazprom Neft Board of Directors review strategy for developing the company’s bunkering business

Press-release Efficiency

The Gazprom Neft Board of Directors has reviewed information on the outcomes of business activities and the outlook for the development of the Gazprom Neft bunkering business.

The company’s specialist bunkering business, Gazpromneft Marine Bunker, established in 2007, is now one of Russia’s leading bunkering companies, with a market share of 16.6 percent. Sales of bunkering fuels reached 2.7 million tonnes in 2017, with retail sales accounting for more than 82 percent of total sales.

Gazpromneft Marine Bunker has the industry’s widest geographic coverage within Russia, operating at all of the country’s key sea and river ports (including 20 and 14 of each, respectively), as well as the ports of Constanta (Romania), Tallinn (Estonia) and Riga (Latvia). Partners to Gazpromneft Marine Bunker include leading Russian and international shipping companies. The company’s own fleet comprises 11 bunkering barges, with total freight capacity of 40,700 cubic metres. Its trans-shipment complexes are located in St Petersburg and Novorossiysk, together providing total storage capacity of 38,400 cubic metres.

A key area of focus in the development of Gazprom Neft’s bunkering business concerns improvements to environmental requirements under the International Convention for the Prevention of Pollution from Ships (the MARPOL Convention), which establishes a range of measures on preventing pollution by sea-going vessels. New environmental standards for bunkering fuels used in emissions control zones came into force in 2015, limiting the level of sulphur compounds in marine fuels to less than 0.1 percent. Their introduction has changed the structure of demand for bunkering fuels in the Baltic basin, with demand for light (highly refined) fuels now up from 11 percent in 2014 to 23 percent in 2016.

New MARPOL standards on the sulphur content of marine fuels are expected to be introduced in 2020, setting a limit of 0.05 percent throughout the world’s oceans, as a result of which low-sulphur fuel oil is expected to command a significant market share. Liquid natural gas (LNG) meeting MARPOL requirements in terms of low-sulphur content and low concentrations of nitrogen compounds is expected to play key role in the bunkering market in the medium to long term. As part of realising the full potential of its bunkering business Gazpromneft Marine Bunker is developing a project unique to the industry, aiming to build Russia’s first LNG-bunkering barge by 2020, as well as taking part in the development of a legal and regulatory framework for the fulfilment of LNG bunkering at Russian ports.

A key strategic objective for Gazpromneft Marine Bunker will be fulfilling guaranteed supplies of bunkering fuels for Gazprom Neft’s Arctic projects. The remit of this new sector in the bunkering market includes the Russian Arctic Shelf and the waters of the Northern Sea Route. Addressing this objective will involve creating bunkering infrastructure of an entirely new quality: terminals capable of operating in the conditions of the Far North, and an Arctic-class bunkering fleet.