On May 1st, Russia wants the transit of Crude oil from Kazakhstan via the “Friendship” (Druzhba) oil pipeline to Germany. The Kremlin announced this last week and gave technical reasons for it. However, political reasons are likely to be in the foreground for Moscow. According to observers, a delivery stop could therefore take longer than would be expected to resolve technical problems.
Concerns about fuel supply bottlenecks are growing, especially in Berlin and Brandenburg. The PCK refinery would be particularly affected by an end to oil transit from Kazakhstan Schwedtwhich is of great importance for supplying the capital region. The East German construction industry is also warning of supply problems. In addition to gasoline, diesel and kerosene, bitumen is also refined in Schwedt, which is used in road construction as a binding agent for asphalt.
Tense supply situation for aviation fuel
According to the PCK refinery, nine out of ten vehicles in Berlin and Brandenburg use fuel from Schwedt. BER Airport is also largely supplied from the Uckermark. The supply of aviation fuel is particularly tight due to the crisis in the Strait of Hormuz. In Berlin and Potsdam, efforts have been made in recent days to dispel concerns about a fuel shortage.
The loss of crude oil from Kazakhstan will not endanger supplies, even if it could result in regional and temporary higher fuel prices, according to the Federal Ministry of Economics, the State Chancellery of the State of Brandenburg and the Federal Network Agency. Behind the scenes, however, the wires are glowing. Because Rosneft Germany, the majority shareholder of the PCK refinery, is seeking replacement for more than two million tons of crude oil from Kazakhstan that were processed in Schwedt last year.
If these quantities fail without replacement, there would not only be a shortage of fuel in the refinery’s supply area in eastern Germany and western Poland. Operation of the refinery would also be made more difficult – for both economic and technical reasons. If the capacity utilization is below 80 percent, the operation is considered unprofitable. Below 60 percent, the system operators in the refinery face completely different challenges.
One billion tons of crude oil from Russia
Especially if the oil from Kazakhstan is missing, the properties of which are close to Russian crude oil, for which the plants in Schwedt were designed for 60 years. Until the Russian attack on Ukraine in spring 2022, more than a billion tons of Russian crude oil were transported to Schwedt and partly to Leuna via the Druzhba pipeline, which opened in 1963. This has been over since the beginning of 2023. The federal government at the time decided to stop importing crude oil from Russia.
Totalenergies’ refinery in Leuna cut itself off from deliveries via the Russian-controlled sections of the pipeline. Rosneft Germany compensated for part of the lost volumes from Russia with imports from Kazakhstan. If the Kremlin is serious about its announcement, they will be canceled in just a few days. Procuring a replacement at such short notice would not be an easy task for Rosneft Germany, even under normal market conditions.
The task is particularly difficult given the crisis in the Middle East and the turmoil in the oil market. In addition, there are the location’s requirements for the physical properties of the crude oil. Because not every replacement for the lost import quantities from Kazakhstan can achieve the desired results when processing in Schwedt. Rosneft Germany also needs an alternative to the Druzhba pipeline as a supply route.
Rostock oil port and Gdansk in focus
Last year, according to management, the PCK refinery processed more than ten million tons of crude oil for the first time since the Russian attack on Ukraine. According to Kazakh state pipeline operator Kaztransoil, more than two million tons were brought from Kazakhstan via the Druzhba pipeline through Poland. The remaining eight million tons of crude oil were mostly transported via pipeline connections from the ports in Rostock and Gdansk to Schwedt.
Figures for the tank farm in the Rostock oil port and the operation of the German section of the Druzhba pipeline provide clues for the distribution between the two sea connections. According to Grosstanklager-Ölfhafen Rostock GmbH, a subsidiary of Euroports, six million tons of crude oil were imported via the port of Rostock in 2024 and pumped via the pipeline to Schwedt. The 200 kilometer long connection belongs to the PCK refinery.
Mineralölverbundleitung GmbH Schwedt, which operates the 26-kilometer-long section of the Druschba pipeline from the German border to Schwedt and the more than 300-kilometer-long section from Schwedt to Leuna, delivered just over three million tons of crude oil to the PCK refinery in 2024. The company is a joint venture between the PCK refinery and Totalenergies.
“Pomeranian line” as an alternative
According to Kaztransoil, around 1.5 million tons of crude oil, half of the amount delivered to the PCK refinery via the Druzhba pipeline in 2024, came from Kazakhstan. There remains a good 1.5 million tons that were transported via the “Pomeranian pipeline” of the Polish pipeline operator Pern from the port in Gdansk to the Polish city of Plock and from here via the Polish section of the Druzhba pipeline to the PCK refinery.
According to the PCK refinery, a total of just over nine million tons of crude oil were processed at the refinery in 2024. The increase in the volume processed to more than ten million tons last year is due to the increased volumes from Kazakhstan. The proportion of imports via the oil ports in Rostock and Gdansk is likely to have remained stable.
This is also due to capacity bottlenecks. According to previous information from the Petroleum Industry Association, the pipeline from Rostock to Schwedt is limited to 6.8 million tons per year. Upgrading the connection, which should increase capacity to nine million tons, has been planned for years. To date, there has been no approval from Brussels for the project’s planned funding of 400 million euros.
Pipeline operator under state control
The Pomeranian Line, operated by the state-controlled Pern, which connects the port of Gdansk via Plock, located a hundred kilometers northwest of Warsaw, with the Druzhba pipeline, has a capacity of around 30 million tons of crude oil per year. In this way, not only the refineries in Leuna and Schwedt are supplied, but also the refinery in Plock with a processing capacity of around 16 million tons. Plans to expand the pipeline are currently on hold.
Capacity in the port of Gdansk is expected to increase by almost a quarter to 49 million tons of crude oil and liquid fuels by 2028. The operator Naftoport is a subsidiary of Pern. The Polish oil company Orlen, in which the state has a 49.9 percent stake, is also one of Naftoport’s shareholders. The refinery in Gdańsk, which, like the refinery in Plock, belongs to Orlen, is also supplied via the port.
Talks are ongoing between Berlin and Warsaw about expanding crude oil deliveries to the PCK refinery via the port of Gdansk. Until now, this option was not open to Rosneft Germany. “An additional supply via the port of Gdansk is still not an alternative for our company,” says the annual report for 2024. The quantities purchased via Gdańsk were accounted for by other shareholders in the PCK refinery.
Polish interested parties for the PCK refinery
The ongoing talks with Poland are therefore likely to not only be about free capacities in the port of Gdansk and on the Pomeranian line, but also about tangible political interests. In any case, there have so far been reservations in Warsaw about supplying a refinery that is controlled by a subsidiary of a Russian oil company such as Rosneft Germany.
Maybe there will be movement in the circle of shareholders? In the fall of 2022, when the federal government placed Rosneft Deutschland’s majority stake in the PCK refinery under trust management, the Reuters news agency reported that Orlen was interested in buying it. Another Polish address with the oil company Unimot is said to have spoken to the British oil company Shell about purchasing PCK shares.
Shell holds 37.5 percent of the PCK refinery and has been wanting to sell its shares for some time. As the smallest shareholder, Eni holds around eight percent. Another interested party for the Shell shares, an Estonian operator of oil terminals, announced years ago as part of his advances that he would also be able to supply the PCK refinery with tank cars by rail in an emergency.
For Rosneft Germany, rail is not an alternative. In the fall, Rosneft Germany agreed with its partners in Kazakhstan that at least 130,000 tons of oil from Central Asia would flow to Schwedt every month. This corresponds to the capacity of a small oil tanker or a freight train with more than 1,500 tank cars and a length of more than 30 kilometers.
Observers assume that without replacing imports from Kazakhstan, operations at the PCK refinery could continue for four to six weeks without disruption. This also depends on how the tanks of Mineralölverbundleitung GmbH in Schwedt are filled. They have a capacity of around 300,000 cubic meters. That’s enough for just over 250,000 tons of crude oil.
