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Russia’s Novatek won’t resume condensate processing at Ust-Luga this month – sources

Russian company Novatek NVTK.MM will not resume gas condensate processing at its damaged complex in the Baltic Sea’s port of Ust-Luga this month, at the very least, sources familiar with the maintenance schedule told Reuters on Tuesday.

Novatek did not immediately reply to a request for comment.

The complex and other energy facilities across Russia have suffered outages due to drone attacks or technical glitches in recent months, adding to uncertainty on global oil markets already rattled by attacks on shipping in the Red Sea.

Novatek on Jan. 21 was forced to suspend some operations at the Baltic Sea fuel export terminal at Ust-Luga as well as “technological processes” at a nearby fuel-producing complex due to a fire, started by what Ukrainian media said was a drone attack.

Novatek resumed fuel exports from the terminal on Jan. 24, loading gas condensate and oil products from its stockpiles.

Analysts have said Novatek will now been forced to export more gas condensate instead of high-margin fuel via other terminals.

According to ship-tracking LSEG data, two tankers – LR2 Aphrodite and LR2 Olivia – had positioned themselves for loading on Monday at Novatek’s Ust-Luga terminal. Sources said both vessels carry gas condensate.

The complex, launched in 2013, receives some 7 million metric tons a year of gas condensate, a type of light oil, from Novatek’s Purovsky plant in Western Siberia to produce oil products such as naphtha, jet fuel and gasoil.

In 2022 the Ust-Luga complex processed 6.943 million metric tons of gas condensate into 6.825 million tons of end products, including 4.208 million tons of light and heavy naphtha.

In 2023, its gas condensate processing volumes rose to 7 million tons.
Source: Reuters (Reporting by Reuters; editing by Jason Neely)

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