Wednesday, 23 April 2014

Unipetrol renews oil imports via Druzhba, but future is unclear

26 September 2012

Prague, Sept 25 (CTK) - Oil imports to the Czech Republic through Russian oil pipeline Druzhba started to grow in the second half of this year compared with the first half, but the future use of Druzhba remains unclear, Mikulas Duda, spokesman of oil importer Unipetrol, has said.

Unipetrol still negotiates oil supplies on a monthly basis. It has already ordered supplies from Russia for October, but supplies for the following months are still being negotiated with traders, Duda said.

"According to preliminary schedules of planned supplies via the Druzhba pipeline, it really seems that we will have a sufficient amount of oil," Duda said about imports for the fourth quarter.

Apart from the Druzhba oil pipeline, oil is delivered to the Czech Republic also through western pipeline IKL from Ingolstadt. Unipetrol has declined to specify what are the shares of supplies in the individual pipelines now.

In July, around one-third of oil supplied to the Czech Republic was delivered via Druzhba.

Russian oil exporters limited supplies through Druzhba following the launch of new Russian sea terminal Ust-Luga in March in an attempt to diversify delivery routes. They also use the possibilities of new routes to create pressure on prices.

In the second quarter of this year, imports via Druzhba dropped to a minimum and Czech importers compensated the drop of supplies from Russia by a growth in supplies from IKL.

However, it is still not clear how Czech oil importers will use Druzhba in the future.

"The structure of supplies will depend on results of our analyses and on submitted offers of potential suppliers," Duda said.

Imports via Druzhba have been falling every year. Last year, supplies through the pipeline made up around 57 percent of Czech oil imports, compared with around 70 percent in the previous years.

In contrast, supplies via pipeline IKL are growing every year. This year, deliveries through IKL will probably make up a majority of exports for the first time.

According to experts, IKL has capacity that will fully compensate supplies through Druzhba, but it is better to have more transit routes available.

Total oil imports to the Czech Republic decreased by about one-tenth year-on-year to 7.06 million tonnes last year, the volume being the lowest since 2004.

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