Russia's Ust-Luga port to operate at half capacity in September due to pipeline damage from Ukrainian drone strikes, sources say

Russia's Ust-Luga port to operate at half capacity in September due to pipeline damage from Ukrainian drone strikes, sources say

Russia's Ust-Luga port, a critical hub for Russian oil and gas exports, is set to operate at half capacity in September due to damage sustained from recent Ukrainian drone strikes, according to market sources. The port, operated by Russian energy firm Novatek, has been targeted twice this year, with the latest attack causing significant damage to its fuel loading and gas processing complex.

The latest drone strike on the Ust-Luga port, which occurred over the weekend, resulted in debris from the drones causing a fire at the Novatek terminal. Alexander Drozdenko, the Governor of the Leningrad Region in Russia, confirmed that at least 10 drones were destroyed, but the fire caused by the debris led to the shutdown of several units at the complex. The fire was brought under control by Sunday afternoon, with no casualties reported [1].

Repairs at the damaged complex are expected to take several months. Market sources have indicated that one unit could resume operations within days, but a second unit could take several weeks to repair. The most seriously damaged unit could take up to six months to repair, according to Reuters' market sources [2].

The damage to the Ust-Luga port is likely to impact Novatek's ability to export naphtha, a key product refined at the complex. Market analysts estimate that the company could curb its naphtha exports in September and ship more gas condensate instead. This is a significant setback for Russia's energy sector, as Ust-Luga is one of the key export hubs for Russian crude oil and fuels.

The drone strikes on the Ust-Luga port are part of a larger pattern of attacks on Russian infrastructure by Ukrainian forces. In addition to the Ust-Luga port, other strategic targets, including the Syzran oil refinery in the Samara region and the Kursk nuclear power plant, have also been hit by drones. The repeated drone attacks have raised concerns about the long-term impact on Russia's refining sector and its ability to export energy products.

References:
[1] https://www.marineinsight.com/shipping-news/ukraine-drone-strikes-hit-russias-ust-luga-port-syzran-refinery-nuclear-plant/
[2] https://oilprice.com/Latest-Energy-News/World-News/Repairs-at-Drone-Damaged-Russian-Baltic-Fuel-Port-Could-Take-Months.html