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Ending The Oil War Isn’t Enough

Ending The Oil War Isn’t Enough

Oil prices rallied on Thursday…

Lukoil Restores Oil Supplies After Russia’s Pipeline Contamination

Pipeline

Russia’s second-largest oil producer, Lukoil, has fully restored the volume of its oil supplies to customers after a major contamination on the Druzhba oil pipeline disrupted Russian crude supply to the west for weeks in the spring.  

Lukoil redistributed its supplies through other export channels, including ports, “which made it possible to avoid negative consequences in executing export contracts,” Lukoil’s First Vice President, Vadim Vorobyov, told Russian news agency TASS on Wednesday.

At the end of April, Russia halted supplies via the Druzhba oil pipeline to several European countries due to a contamination issue, which the Russians said was deliberate.    

The oil was contaminated with organic chlorine, a substance used in oil production to boost output but dangerous in high amounts for refining equipment. The amounts of the chemical were found to be at levels much higher than the maximum allowable amount.

“On the part of Lukoil’s permanent western partners — oil buyers on the southern branch of Druzhba and those from Belarus — there are currently no complaints about quality inconsistency of the supplied oil with the agreed parameters,” the manager told TASS today.  

Last Friday, just days after Russia had said it had fully resumed oil flows to Europe via the Druzhba pipeline, a Shell oil refinery in Schwedt,  Germany, halted imports via the pipeline because, again, slightly higher concentration of organic chlorine was found in the crude, a Shell spokesman told German business daily Handelsblatt.

On Tuesday, a Shell spokeswoman told German media that flows from the Druzhba pipeline to the PCK refinery in Schwedt resumed on Saturday after a one-day halt on Friday. The refinery is back to normal operations, the spokeswoman said, without commenting on the matter further.

Also on Tuesday, an executive at Polish pipeline operator PERN said that flows via the Druzhba pipeline could be suspended again because of higher than normal levels of organic chlorine.

“I would really like it not to be the case, but... there will always be remaining oil which could have higher chloride content,” Reuters quoted PERN’s chief executive Igor Wasilewski as saying yesterday.  

By Tsvetana Paraskova for Oilprice.com

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