* Flows through Druzhba oil pipeline at half of capacity
* Alternative TAL route congested
* Czechs refiners hit, also affecting Poland, Germany
By Jan Korselt and Julia Payne
PRAGUE/LONDON, Nov 8 Central European countries
face the prospect of refinery disruptions and higher energy
bills as Russia diverts oil exports to Asia and alternative
import routes become expensive and congested.
Russian flows through the Druzhba pipeline, which has
historically accounted for the bulk of central Europe's oil, are
running at only half of capacity after Moscow built new direct
routes and ports to supply north European and Asian markets over
the past decade.
"It is true that currently we are getting into some critical
situations ... Representatives of the refineries may have
underestimated the situation," said Jaroslav Pantucek, the chief
executive of Czech pipeline operator Mero.
Dwindling Russian deliveries serve as a worrying reminder of
supply wars between the world's largest energy producer and its
neighbours such as Ukraine. Moscow says its latest supply
decisions, however, are not politically motivated and that it
simply seeks to use the most economical export routes.
The pipeline bottleneck is tightening oil supplies ahead of
winter, leading to price rises for consumers as far as Germany.
The Czechs and some German refiners earlier this year relied
on the Transalpine pipeline (TAL), which runs from the Adriatic
port of Trieste to Germany and the Czech Republic and had
But TAL no longer has that capacity after one of its
shareholders, Germany's Miro refinery, switched from a more
expensive French route to become almost entirely reliant on TAL.
Another German refinery, Ingolstadt, also restarted and has
begun taking capacity.
"The Czechs can ask for more in the case TAL has free
capacity, which didn't exist in October," TAL's operations
manager, Karl Gassner said. "In November ... there is no room
for extra. Maybe there is some in December," he said, adding
that allocations would not rise in 2013.
The Czechs have already been forced to bring forward
maintenance work at the 68,000 barrel per day (bpd) Kralupy
refinery due to short supplies.
The Czech economy can ill afford higher energy bills. It has
been in recession since late 2011, the worst performance in
Russian oil supplies via Druzhba to Europe dropped this year
to multi-year lows of around 900,000 bpd after Moscow launched
the Ust-Luga port in the Baltic and began ramping up exports to
"If I had a refinery on Druzhba, I would sell it now,"
Alexey Kornienkov, head of strategic planning and business
development at Russian oil firm Gazprom Neft, said last month.
While Russian pipeline operator Transneft said it would look
to increase exports to the Czech Republic in November, limited
flows will persist amid congestion of alternative pipelines and
routes such as TAL.
"The supply bottleneck highlights the vulnerability of many
Central European refineries in terms of supply security and the
big implications of lower crude flows via the Druzhba pipeline,"
said David Wech from Vienna-based JBC Energy consultancy.
The Czech Republic sits on the same spur of Druzhba that
delivers to Slovakia and Hungary, known as the southern leg.
The northern leg supplies Poland and Germany, which had
imported up to 1 million bpd during peak years last decade but
now often get as little as 600,000 bpd.
Russian oil exports to Poland via Druzhba have fallen by a
quarter in recent years, and industry sources say Polish
refiners are increasingly concerned about a repeat of the Czech
scenario and a sharp drop in supplies.
Worries arise not only from the fact that Russia is
diversifying export routes but also from fears that a recent
purchase by state major Rosneft of BP's Russian
venture TNK-BP will further cut deliveries.
"The news sent the Poles fretting as they know perfectly
well that Druzhba has never been high on Rosneft's preferred
routes list," said a Russian oil industry executive.
TNK-BP is set to supply around 40 percent of Russian
deliveries to Poland via Druzhba in the fourth quarter, more
than any other producer. It remains to be seen how shipments
will change when Rosneft closes the purchase of TNK-BP next
"In Poland we have two supply routes - via the Druzhba
pipeline and through the Gdansk-based seaport Naftoport. So far
we haven't have any problems with crude oil supplies," PKN
Orlen's press office said.
"PKN Orlen is analysing the possibilities of buying many
kinds of crude from various geographical directions."
Both Poland and Germany have already been forced to import
large amounts of oil this year from the sea to compensate for
lower deliveries via Druzhba.
"There have been months when both countries had to import
over 10 tankers a month of Russian oil," a major supplier to
Germany's largest refinery, the 310,000 bpd Miro plant in
Karlsruhe, had to reduce production due to lack of crude last
month, even though it had priority to TAL capacity, traders
Wech from JBC said he believe the situation for Miro was not
as bad as for central European refiners.
"The disruption could turn out to be a short-term phenomenon
or at least limited to peak demand periods as demand from German
refiners is particularly strong at the moment," he said.
With Russia due to open a second pipeline to Asia in the
next month, competition for its resources will increase. Further
straining the picture is Russia's booming domestic demand and
broadly stable production.