From production and processing to the sale of petroleum products

Production

INA produces oil in Croatia, Egypt and Angola. Oil produced abroad is sold on foreign markets, and oil produced on the domestic market is processed at the Rijeka Refinery and sold on the market. In 2019, INA produced around 31,000 barrels of oil equivalent per day from the fields located in Slavonia, Moslavina and Podravina, which covers between 15 and 20% of the total Croatia’s oil demand. Crude oil is transported by pipelines to Sisak, and from there, a part of it is transported by rail to the Rijeka Refinery, while the rest is sold on the market at market prices calculated according to the average monthly Dated Brent price. The company’s goal is to achieve the greatest economic value, which will provide the company with funds to finance development projects and contribute to a sustainable business model.

INA Downstream 2023 New Course

Among the development projects being carried out are those within the INA Downstream New Course 2023 programme, which envisages the concentration of oil processing within Croatia at the Rijeka Refinery, and consequently, an investment of around HRK 4 billion in the construction of a residue upgrade unit. The programme also includes the transformation of the Sisak location into an industrial site that would produce bitumen (starting in the first half of 2021) and lubricants. Sisak would also become a logistic hub and potentially a bio-components refinery with the goal of producing second-generation bioethanol from biomass.

INA Downstream 2023 New Course programme is the company’s response to the significant changes that the global refinery business has been experiencing over the past 10 years. Due to changes in market demand, new regulations related to fossil fuels and the switch the entire Europe is making towards sustainable business, it is necessary for INA to be flexible and adapt strategic guidelines in a way that ensures the highest long-term value for the company.

As one of the steps in the transformation of the business model and additional insurance of production in the oil fields, the company made a business decision to sign a Memorandum of Understanding with JANAF, which implies the intention to establish better optimisation of oil transport between JANAF’s Sisak Terminal and Sisak Refinery. Also, this allowed for optimisation of available storage space and increased the flexibility of INA’s oil and gas exploration and production.

Oil transport and processing

INA processes around 4 million tonnes of oil per year and sells around 2 million tonnes of manufactured petroleum products on the domestic market, which has total demand of 2.7 million tonnes per year. Around 2 million tonnes of the remaining products are exported by the company to the international market.

Apart from the railway trasport from Sisak, oil is also shipped to the Rijeka Refinery from international markets – by sea to JANAF’s terminals in Omisalj on the island of Krk, and then by pipeline to the Refinery. The Rijeka Refinery can process a wide range of different types of crude oil (import by sea), but currently it mostly processes the low-sulphur, light, sweet oil (e.g. Azeri) which, compared to oil from domestic fields, provides a better product structure (more diesel) and contains no mercury.

In the refinery, oil is stored in tanks and then pumped to the refinery plants for primary processing. These plants use an atmospheric distillation process to separate the crude oil into individual components called fractions.

The lightest oil fractions are used to produce liquefied petroleum gas (LPG), which is used for powering cars and for household use (bottled gas). Petrol fractions of oil are processed in several secondary plants that raise the quality of the fractions so that they can be used to blend petrol of appropriate quality for powering car engines.

Medium oil fractions are processed in secondary plants with the goal of achieving the quality required for the production of aviation fuel (kerosene), diesel for powering cars and trucks, and extra light fuel oil used in household heating systems.

The heaviest oil fractions are further processed in heavy fraction processing plants, where some of the heaviest oil components are processed by chemical processes into lighter fractions, which can be used in the production of petrol, kerosene and diesel. A part of the heaviest oil fractions that cannot be processed further is used for the production of heavy fuel oils used as marine fuels, and as fuel in thermal power plants.

By processing low-sulphur, light oil (e.g. Azeri), fuel oil with less than 0.5% sulphur content is produced, which is in line with the new regulations of the International Maritime Organisation (IMO), which defines the quality of marine fuels. Also, due to the residue upgrade unit that will become operational in 2023, the product structure of the Rijeka Refinery will be further improved by increasing the share of profitable white products, i.e. motor fuels.

Quality control and sales

The quality of all fractions processed in the refinery, as well as the quality of finished product, i.e. fuel, is continuously controlled in the refinery laboratory.

The finished product is shipped from the refinery to consumers by road, rail and sea. Most of the product is sold at more than 500 INA’s retail sites in Croatia and the region, while the rest is exported.