Transneft expects full restoration of Druzhba pipeline work from July 1

TASS Russian News Agency | Jun 14, 2019 at 4:44 PM

NOVOROSSIYSK, June 14. / TASS /. Transneft expects that the work of the Druzhba pipeline after the displacement of off-grade oil will be restored staring on July 1, Deputy President of the company Sergei Andronov told journalists on Friday.

"We expect that starting July 1, Druzhba will work in full force. We see applications from companies on the increase. We see applications from companies and confirmations from plants," he said. Andronov noted that Transneft is currently under negotiations on oil volumes.

"Let me explain why. Due to the fact that Druzhba did not work and they had accumulated volumes that were produced in the republic. Therefore, we should also take this into account. Therefore, their volumes, which cannot reach their destination, they can be recycled in the republic. Accordingly, the Russian volume will decrease and will be sent to the ports," he said. Andronov stressed that the most important thing with Belarus is to supply 18 million tonnes of oil per year. "We are moving towards this. We see no risks of revisions," he added. Andronov also explained that at present, Transneft is discussing with its counterparties the permissible level of organochlorine. "The decrease of polluted oil volumes will depend on what decision is made," he added. Earlier, Rashid Sharipov, Transneft Deputy President, said that " It will probably take 2-3 months to make and consolidate proposals on settlement of the consequences of the incident, after which they will be formalized," He noted that potential losses from contamination of oil in Druzhba might be figured out by the end of summer. "It (evaluation - TASS) is to be finalized within 2-3 months, roughly by the end of summer," he said when asked about the expected amount of losses due to the pipeline’s contamination.

The Druzhba oil pipeline provides supplies of oil to Belarusian refineries and its transit to Europe through Belarus, Poland and Ukraine.

In mid-April, Belneftekhim reported a sharp deterioration in the quality of the Russian oil running through the pipeline. As a result, several states stopped receiving and refining the Russian oil. The contaminant source was revealed at the Samara-Unecha section. Transneft said that the Russian oil in the Druzhba pipeline was deliberately contaminated. Russia’s Investigative Committee said that contaminated oil was loaded into the Druzhba oil pipeline in order to conceal multiple oil thefts.

Supplies of on-spec oil to Belarus resumed in early May.

On June 3, the talks on settlement of the issue around supplies of contaminated oil were held in Moscow, after which Russia’s Deputy Energy Minister Pavel Sorokin told reporters that all participants reached a common understanding of the principles for calculation of compensations for supplies of off-spec oil.

On Tuesday, June 11, Kommersant business daily wrote with reference to sources that Rosneft had asked Deputy Prime Minister Dmitry Kozak to speed up decision-making regarding compensations for losses of Russian crude producers from contamination of oil with chlorides in the Druzhba oil pipeline. Russia’s top oil producer explained that it had already received claims from Belneftekhim for $155 mln and another $450,000 from Poland’s Orlen.