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(Bloomberg) — Commodity trader Alkagesta will start delivering aviation fuel through one of Europe’s most important energy pipeline networks as part of a supply agreement.
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The firm will provide fuel for airports, including in Brussels and Frankfurt, through the NATO Central Europe Pipeline System — which comprises more than 5,000 kilometers (3,100 miles) of pipes linking airfields, refineries, depots and ports. The deliveries are expected to start this spring, with fossil jet fuel making up 98% of the blend and sustainable aviation fuel the rest.
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The pipeline system was created in the 1950s during the Cold War to supply NATO forces with fuel. Today, it supplies both military and commercial transport hubs. Although it mainly handles jet fuel, the CEPS is also used to transport other products, such as diesel.
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Alkagesta’s supplies through the pipeline system will be relatively modest, at just 1,700 barrels a day, a spokesperson for the company said. A further 3,400 barrels a day will be delivered to airports in northwest Europe via the firm’s existing logistics capabilities — including cargo trucks and coastal terminals — as well as through buying extra capacity in the CEPS.
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While small in the context of the European Union’s wider market, this will be the first time that the trader will directly supply airports. The bloc imported more than 400,000 barrels a day of jet and kerosene-type fuel via ships last year, according to Vortexa data compiled by Bloomberg.
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Select companies are given commercial access to CEPS to distribute fuel to European aviation hubs, according to Alkagesta. The firm’s supply agreement is with CEPS contracting authorities.
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Founded in 2018, Malta-headquartered Alkagesta deals in multiple commodities, including petroleum, steel products and fertilizers. Last year, its total trading volume hit 8.7 million tons.
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