May 14, 2019 / 5:10 PM / 3 months ago

Polish refiners see clean oil from Russian pipeline soon

KATOWICE, Poland (Reuters) - Polish refiners PKN Orlen and Grupa Lotos expect to receive normal quality oil via the Druzhba pipeline from Russia in the coming days, the deputy heads of the two companies said on Tuesday.

Flows through the Druzhba pipeline to Poland and other European countries were suspended last month after contaminated crude entered the system, sending shockwaves through global oil markets.

“We are working very intensively on a solution and we are talking about several, maybe a dozen or so, days,” Lotos deputy chief executive Jaroslaw Kawula said on the sidelines of a conference in Katowice, southern Poland.

His words echoed those of PKN Orlen deputy chief executive Zbigniew Leszczynski, who also said he expected normal quality product to start flowing to Poland through the pipeline in the next dozen or so days.

“Clean oil meeting the required norms is already in Belarus ... so now it is a question of giving the green light to open the pipeline,” said Kawula.

During a panel discussion, Kawula said the company had started accepting oil shipped from Primorsk, Russia.

Kawula said he expects the financial impact of replacing Russian oil with oil delivered via sea and from reserves to be neutral for Lotos, which hopes that its oil suppliers will cover the costs of refining oil other than that supplied via Druzhba.

Seaborne oil imports via the Baltic Sea port of Gdansk in Poland are expected to rise to 1.5 million tonnes in May, a record for any month, Refinitiv Eikon data showed on Tuesday.

RESUMPTION

Meanwhile, the chief executive of Polish pipeline operator PERN told the same conference it will resume the flow of Russian oil if requested by its refinery clients.

“PERN is a logistical business and we implement what the client wants. If refineries decide that they are ready to take in this oil, then we will make it possible,” PERN’s CEO Igor Wasilewski said during a panel discussion.

Various solutions regarding how to handle the contaminated Russian oil are on the table and are being discussed by the refineries, he added.

Lotos’s Kawula said that PERN and its clients — two refineries in Poland and two in Germany — were continuing talks on how to store the contaminated oil and what portion of it should be sent to each refinery and mixed with normal oil.

He said Lotos is reluctant to take any of the contaminated oil.

Reporting by Agnieszka Barteczko and Wojciech Zurawski, Writing by Joanna Plucinska and Alan Charlish; Editing by Catherine Evans

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