The Ministry of Energy of the Russian Federation is analyzing the possibility of building a system of oil storage facilities, so that they become similar to the American system and allow to smooth out fluctuations in supply and demand.
According to Deputy Head of the Ministry of Energy Pavel Sorokin, the issue of creating storage facilities is currently being actively worked out by the Ministry of Energy together with companies in the industry. This is a complex issue, the purpose of which is to understand the potential of this project in terms of smoothing fluctuations in supply and demand, creating prerequisites for activation of trading based on Russian crude oils, and most importantly, the cost of the project. Based on the results of these surveys, it will be possible to determine the feasibility of construction of additional storage facilities.
Sorokin pointed out that, to his mind, the most profitable option would be a public-private partnership, including the involvement of international investors, with the coordination of the state. This will create additional conditions for the use of storage facilities and allow trading on the basis of Russian crude oils.
In his turn, the head of Russian Gas Community Pavel Zavalny noted that the existing storage capacity is sufficient for operating activities, but it will not be enough in the event of a deep crisis. He stressed that fluctuations in demand force Russia to sharply reduce production, although the country could simply increase reserves if there were storage facilities for raw materials.
In accordance with the OPEC+ agreement, which came into force in May, Russia has committed to reduce production by 2.5 million barrels per day from the level of 11 million barrels. It was assumed that this restriction would only last until July, but in June, the participants in the deal decided to extend the quotas in this form for another month.
Experts did not rule out that if there is no place to store oil, Russian companies will start burning it, since the production restriction in some cases will lead to the loss of the well.
Source:
http://www.primepress.info/full-news-203290
