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Russia Getting Closer to Restoring Clean Oil Flows to Europe


May 7, 2019, by Dina Khrennikova
(Bloomberg)

Russia is getting closer to restoring supplies of uncontaminated oil to Europe via both sections of the Druzhba pipeline and the Baltic port of Ust-Luga, the country’s energy minister said.

“On May 6, shipments of compliant crude started in the direction of Brody point,” in Ukraine, from where they can reach European consumers, Energy Minister Alexander Novak said at a government meeting Tuesday. “In the near future, we expect an agreement to start shipments in the direction of Poland,” he said. Ust-Luga will receive the first batches of clean oil Wednesday morning, according to Novak.

That’s a slower timetable than Russia previously indicated. Deputy Prime Minister Dmitry Kozak pledged on April 27 that the nation will fully restore normal supplies through the pipeline within two weeks, but Novak now says that should happen in the second half of May. Belarus has estimated it may take “months of hard work” to do so.

The Russian authorities also have yet to offer a comprehensive solution for removing all contaminated oil from the system.

Poland and Ukraine are transit countries for the northern and the southern link of the Druzhba pipeline, respectively, and the resumption of the flows would mark a gradual return to normal operation after the outage which has lasted more than a week. Ust-Luga is the key sea gateway for Russia oil supplies to Europe, and contamination issues at the port risked choking off exports to the continent.

Refineries in some east European countries refused to accept oil from the Soviet-era pipeline after Belarus, another transit country for Druzhba, reported an extremely high level of organic chlorides in the shipped volumes. Russia later confirmed contamination of its batches with the organic compounds that can severely damage refinery equipment.

Russia’s Deputy Prime Minister Dmitry Kozak pledged on April 27 the nation will restore the supplies within two weeks, while Belarus estimated it may take “months of hard work” to fully resume flows.

Russia’s crude oil output and exports have not been affected by the Druzhba halt, Novak said. The nation produced 11.233 million barrels a day of crude in April, according to Bloomberg calculations based on data from the Energy Ministry’s CDU-TEK unit.



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