Gazprom developing sulfur production, sales strategy
MOSCOW. July 12 (Interfax) - Gazprom is developing a strategy to produce sand sell sulfur in the short- and long term.
The Russian gas giant said in its corporate journal that the Gazprom VNIIGAZ R&D Institute was drafting the strategy. It says annual demand for sulfur from the construction and highway sectors could top 500,000 tonnes by 2020 and approach 1.5 million tonnes by 2030.
The most promising field of application for sulfur is the production of new building materials. As much sulfur could eventually be used to make these materials as phosphates are today. The institute has helped to devise methods to produce sulfur cement and sulfur concrete. A long-term program is being drafted to develop an industry for sulfur bonding materials to 2030.
Sulfur production rose from 6.33 to 6.44 million tonnes in 2011. Gazprom produced 5.76 million tonnes or 89% of this. The company says the market might not be able to digest all of this sulfur - LLC Gazprom Sulfur, a dedicated operator for sales to the domestic market , sold just 2.039 million tonnes in 2011.
More than two-thirds of the sulfur that Russia produces is exported and only 20% is supplied to the domestic market, mostly to the chemicals industry (76%).
Sulfur production could grow by 1 million tonnes by 2015 and consumption by more than 1.5 million tonnes, so most of the sulfur that is produced will still be exported in the foreseeable future.
Global sulfur production last year was around 69 million tonnes, the biggest producers being China (13.9%), the United States (12.8%), Canada (10.3%) and Russia (10.3%). The biggest importers were China (32%), North and South Africa (24%), United States (10%), South America (7%) and India (6%).
The Middle Eastern countries could put another 8 million tonnes of sulfur on the market each year as they commission new capacity to extract and process hydrocarbons. At least 1 million tonnes a year will be produced at Kazakhstan's giant Kashagan oil and gas field, due to go on stream in 2018, and Kazakhstan as a whole could be producing more than 3 million tonnes by 2020. The South Yoloten field in Turkmenistan might yield another 3 million tonnes or more per year at the same time.
Gazprom's usual markets are Morocco, Tunisia, Brazil, Israel and Lebanon. Sulfur is shipped by rail to consumers in Lithuania and Belarus.
It is shipped to non-CIS countries by rail in two main directions, north and south. The former involves a 2,590-km journey from source to the port of Ust-Luga and the latter involves several routes: by road to the Buzan river port in the Astrakhan region and onwards by river-sea barges to export destinations or to the port of Kavkaz, where it is transferred to dry cargo ships. Sufur is also shipped 916 km by rail to the Ust-Donetsk river port in the Rostov region, where it is loaded onto barges and taken along the Volga-Don canal to Kavkaz. It is also shipped by train to the Ukrainian Black Sea ports of Mikolayiv and Ilichevsk (1,621-1,955 km) and then loaded onto dry cargo ships for export.
Gazprom considers that port infrastructure needs to be developed to improve sulfur logistics in Russia. Russia does not have one deep-water port capable of meeting the needs of sulfur exporters in their entirety. One is being designed on the Taman Peninsula in the Krasnodar territory and it might be completed in 2016. Gazprom might export up to 2 million tonnes of sulfur per year via this port. For now, the company is renovating capacity at Buzan, which handled more than 1.4 million tonnes of sulfur in 2011 and could be expanded to handle much more in the short term. Efforts are under way to develop complexes to produce granulated sulfur. The KazRosGas joint venture between Gazprom and Kazakhstan's KazMunayGas is drafting a project to create 500,000 tonnes of granulation capacity per year at the Orenburg gas refinery.
Gazprom's Gazprom Production Astrakhan and Gazprom Production Orenburg produce the gas giant's sulfur.
