Poland and Russia Secure Kazakh Oil Transit to Germany

Written by Henrik Rothen

May.26 - 2024 10:57 PM CET

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Photo: Shutterstock.com
Photo: Shutterstock.com
Poland and Russia reach a crucial agreement to keep Kazakh oil flowing to Germany amid payment disputes.

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Polish pipeline operator PERN and Russia's Transneft have reached an agreement to continue the transit of Kazakh oil to Germany, according to sources from Reuters.

There had been concerns that deliveries might halt in June due to payment issues.

A Threat to Oil Flow

In April, Transneft alerted Kazakhstan about a potential stoppage in transit because of a deadlock over payment for certification work in Poland.

The calibration of oil flow meters on the Polish section of the Druzhba pipeline needed to be completed by June 5. These devices require periodic certification to meet Russian standards.

Financial Arrangement Reached

To avoid disruption, PERN, Transneft, and German refinery PCK Schwedt, which receives the Kazakh oil, agreed that PCK Schwedt would cover the certification costs.

The actual work will be carried out by an unnamed Slovak company, sidestepping potential sanctions against PERN.

Kazakhstan relies heavily on Russia for its oil exports, with most of its 1.5 million barrels per day (equivalent to 1.5% of global supplies) transported through various Russian pipelines, including Druzhba.

The northern branch of this pipeline, running through Poland and Belarus to Germany, transports Kazakh KEBCO oil to the Schwedt refinery, which supplies a significant portion of Berlin's fuel.

Germany is set to receive 1.2 million tons of oil from Kazakhstan in 2024.

The Druzhba pipeline, managed by Transneft, is one of the largest in the world, with a capacity of 2 million barrels per day. However, the volume of oil transported through it has significantly decreased following the invasion of Ukraine, as the European Union has ceased purchasing Russian oil.

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