Water consumption

Oil and gas production entities of LUKOIL Group mainly use water for formation pressure maintenance and in the desalting of produced oil.

Refining, Marketing and Distribution business segment entities (excluding the business sector «Power Generation») totally consume for own needs around 47% of all water usedIn this case, the volume of water consumed for own needs by the Refining, Marketing and Distribution business segment of total consumption for own needs by LUKOIL Group is implied. across LUKOIL Group. The Company implements measures annually to optimize water consumption. In 2019 a new water recycling system was introduced at the Korobkovsky GPP, which resulted in reduced consumption of make-upMake-up water is water that has been chemically and thermally processed and is intended to compensate water losses in heat-consuming facilities and heating networks. water. There are plans to implement investment projects for the construction of a boiler water treatment unit at the Nizhny Novgorod Refinery and the upgrading of the water recycling units at the Volgograd Refinery with the decommissioning of obsolete equipment to boost water use efficiency.

Power generation entities use water to generate steam and cool equipment in thermal power plants. The water consumptionIn this case, the volume of water consumed for own needs of the “Power Generation” sector from the total consumption for own needs of LUKOIL Group and Russian entities is implied. for own needs by the organizations of the business sector Electricity is about 62% of the water consumption structure of Russian organizations and about 36% of the water consumption of LUKOIL Group.

The Group’s oil and gas production, transportation and refining organizations use water withdrawn from the sea. Water from the Caspian Sea is used by LUKOIL-Nizhnevolzhskneft to cool equipment and is returned chilled to almost its natural temperature back to the sea without being used in other production processes and without being contaminated.

The Italian refinery (ISAB) withdraws water for production purposes from the Mediterranean Sea. After desalting, sea water is used to cool oil processing facilities. In order to reduce water consumption at the plant, part of the steam condensate circuit and the recovery system has been optimized, and measures have been taken to reuse sea water after treatment.

Specific water consumption by Russian entities remains relatively stable across all business sectors.

Specific water consumption for operational needs by Russian LUKOIL Group entities, broken down by types of activity
2017 2018 2019
Oil and gas extraction, cubic meters/tonne of oil equivalent in hydrocarbon resources 1.0 1.0 1.0
Oil processing, cubic meters/tonne of processed oil 0.5 0.5 0.5
Petrochemicals, cubic meters/tonne of processed raw materials 7.3 6.4 6.9
Oil product supply, cubic meters/tonne of oil products sold 0.07 0.10 0.07
Transportation, cubic meters/tonne of oil, oil products transported 0.02 0.02 0.01
Power generation, cubic meters/tonne of oil equivalent in consumed fuel 34.4 34.0 35.3

Notes. (1) Specific indicators are calculated based on volumes of water consumed by LUKOIL Group entities for their own needs. (2) Fluctuations in the indicators of petrochemical and oil refining entities are mainly due to a change in the volume of products produced. (3) The performance of the indicator of the Power Generation business sector is explained by the fact that in 2019, along with a decrease in production due to a warm winter, a number of standard technical measures were taken at LLC LUKOIL-Kubanenergo and LLC LUKOIL-Stavropolenergo. (4) The change in the methodology for accounting for water use in 2018 did not affect the value of the indicators for 2017.