Poland seeks German support to sanction the Russian Druzhba crude oil pipeline

Two sources familiar with the talks say Poland wants German support to impose EU sanctions on the Polish/German section of Druzhba’s crude oil pipeline. This will allow Warsaw to abandon its deal to purchase Russian oil next year, without having to pay penalties.

Sources also claimed that the two countries were close to an agreement to coordinate seaborne oil supplies from Poland via Gdansk and part Druzhba to Germany. This would facilitate Poland’s purchase of the Russian-owned Schwedt refinery.

While the EU has committed to stop buying Russian oil via sea routes starting Dec. 5, Druzhba remains exempted from sanctions. This presents a problem to Polish refiner PKN Oder which has a long-term agreement to purchase Russian oil via the pipeline. It would have to pay penalties for breaking the contract.

Both countries would be free from their Russian oil import commitments if the EU imposed sanctions on Druzhba (or at least its northern section that supplies Poland and Germany).

The pipeline’s southern section supplies Hungary, Slovakia, and the Czech Republic, which, unlike Germany and Poland, would have difficulty diversifying their oil imports.

Sources say that the German economy ministry and the Polish climate ministry are at the end of negotiations on a memorandum on oil logistics. This could allow non-Russian flows to be opened and help Poland’s top refiner pursue their interest in Schwedt.

Germany is committed to using no Russian oil after 2023 and is currently working with Poland to ensure the supply of Schwedt. A spokeswoman for Berlin’s economy ministry said Friday. Polish climate ministry stated Friday that Poland and Germany have agreed to fulfil their pledges to stop buying Russian oil. Both countries are working together to do so.

Germany has placed Schwedt under a six-month trusteeship. It is not looking to nationalize the refinery but it is trying to find ways to provide oil.

Poland and Germany had promised to try to stop Russian oil imports via Druzhba’s northern leg by the year’s end, but Orlen is still bound to its contract with Tatneft.

According to one source, the Polish refiner has approved Druzhba supplies for 2023 according to the contract. However, these would be stopped if the pipeline is hit with sanctions.

Orlen did not comment on Friday.

The company has reduced its dependence on Russian oil to just 30% and replaced it with supplies from Saudi Arabia and Norway, among other things.

Kommersant newspaper reported that Orlen had applied to Transneft, the Russian oil pipeline operator, for a 3 million tonnes of oil supply to Poland via Druzhba by 2023.

The control of Schwedt, which supplies western Poland with oil, would increase Orlen’s refining capabilities and allow for more control over oil flows and products in the region.

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