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(Bloomberg) — Germany is in talks with the Polish government on the transit of additional crude supply for a refinery near Berlin that’s about to stop receiving Kazakh flows.
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Kazakhstan has been shipping crude to the Schwedt refinery through Russia’s Druzhba pipeline since 2023 when Europe all but halted Russian crude imports following the war in Ukraine. Russia has suspended that deal from next month, leaving Kazakhstan to reroute those volumes.
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The loss of Kazakh supply won’t “jeopardize the security of supply of petroleum products in Germany, even if the PCK Schwedt refinery were to operate at reduced capacity,” said a spokesperson for Germany’s Federal Ministry for Economic Affairs and Energy.
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The move leaves Schwedt — which supplies Berlin with aviation and other transport fuels — scrambling for alternative supply at a time when oil-processors across Europe are looking to replace Middle East grades that are no longer arriving at its ports due to the Iran war. The Czech Republic — which imports fuels from Germany — has said it is looking at contingency in case of disruption to production at Schwedt.
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The landlocked Schwedt refinery is one of many European oil-processing plants built in Soviet times to process Russian crude. After the Ukraine war prompted sanctions on Russian crude, Schwedt started to bring crude supply in by pipeline from the port of Rostock, as well as using Poland’s pipeline system for flows from Gdansk.
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“We are in discussions with Poland to examine whether short-term and temporary replacement deliveries via Gdansk are possible,” the ministry spokesperson said. “The Federal Government is prepared to support the company in substituting the lost crude oil supplies through alternative sourcing channels.”
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In the first quarter of this year, Kazakhstan almost doubled crude flows to Germany to 730,000 tons, equivalent to almost 60,000 barrels a day.
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The refinery is partly owned by Eni Spa and Shell Plc, which has been trying to sell its holding. A holding by Rosneft PJSC is held under trusteeship by the German government.
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According to the ministry, it will be the companies that sign contracts for additional supply but Germany is “closely supporting them in this regard.”
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Polish pipeline operator Pern is ready to agree additional supply for Schwedt but won’t sign contracts with Rosneft, Chief Executive Officer Daniel Swietochowski said last week.
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—With assistance from Olga Tanas, Nariman Gizitdinov and Maciej Martewicz.
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