Polish importers of Russian oil claim that they can replace the supply of raw materials from Russia using alternative energy delivery routes. Such statements were made after the announcement of Warsaw about stopping the transit of Russian oil via the Druzhba pipeline.

The corresponding statement was issued on the eve of the Polish Ministry of Energy, and the Belarusian company Gomeltransneft notified the Russian side of the suspension of deliveries in the western direction. The reason for this decision in Warsaw called the low quality of oil, which can damage the equipment of oil refineries in Poland and Germany.

After that, the largest Polish oil refining company PKN Orlen claimed that the presence of oil reserves in its storage facilities, as well as contracts concluded with Saudi oil company Saudi Aramco, will help to compensate for the possible shortage of raw materials.

“Thanks to the implemented policy of diversification of supply routes, which was carried out by the Orlen Group, now 50% of the oil that PKN Orlen acquires for the plant in Plotsk does not come from the Russian direction. For example, from Norway, Angola, Nigeria and Saudi Arabia ”, - Polish radio company RMF24 quotes the statement of the company.

According to Orben’s development board member Zbigniew Leszczyński, they are ready to work without Russian oil for several months.

At the same time, Leshchinsky stressed that Orlen received data on improving the quality of oil. “Signals reach us that the quality of oil in the Druzhba transit pipeline on the section, which, of course, is not in Poland, can already be better. We expect that in the coming days, the quality of oil will improve, ”- quoted Leshchinsky TASS.

Another Polish importer of Russian raw materials, Grupa Lotos SA, stated that it was considering routes for oil delivery through the Gdansk terminal. The possibility of using alternative Russian routes for the delivery of oil to Poland was previously announced by the Polish Ministry of Energy.

In early February 2019, Orlen CEO Daniel Orbaitek, in an interview with one of the largest Polish newspapers Rzeczpospolita, noted that his company was pursuing a policy aimed at increasing non-Russian oil supplies in order to “ensure the energy security of Poland”.

Nevertheless, according to the data of the Central Bank of the country published last year, 76% of the oil purchased by the Poles came from Russia.

As Reuters agency noted in May 2018, the Poles had to pay dearly in the literal sense of the word for ensuring the diversification of oil supplies: oil supplied from other countries cost more than Russia.

  • PKN Orlen gas station in Krakow
  • globallookpress.com
  • © Beata Zawrzel

Recall that the increased level of organic chlorides in Russian oil going to the west was first reported in Belarus last week. The Belarusian side even stopped the supply of diesel fuel and gasoline to Ukraine, Poland and the Baltic countries. The Russian Ministry of Energy, in turn, stated that they are keeping the situation under control, and the oil pollution incident is of a technical nature.

As the leading expert of the National Energy Security Foundation Igor Yushkov noted in an interview with RT, the situation with the supply of polluted oil to Poland and Belarus requires an investigation, but should soon be normalized. At the same time, according to him, in the long term, Warsaw will not refuse to buy Russian oil.

“Unlike the gas sector, where Poles are willing to buy more expensive gas at high prices, only it was not Russian, the oil industry is less politicized,” explained RT Yushkov.

According to the expert, abandoning Russian oil, Polish companies are at risk to seriously lose.

“Oil supplies from Russia are more profitable. The cost of delivery by tanker is much higher, - said Yushkov. “The question is whether the capacity of the oil pipelines from the ports at the refinery is enough.”

Help neighbors

Information about the suspension of Russian oil supplies to Poland appeared against the backdrop of the Polish leadership’s statement regarding the purchase of other hydrocarbons - liquefied natural gas. On April 24, President Andrzej Duda announced that Poland would soon “not only become fully sovereign in terms of gas supplies, but also provide this kind of security to its neighbors.”

  • Polish President Andrzej Duda in Swinoujscie
  • © prezydent.pl

As noted by the state-owned Radio Poland, the president mentioned Ukraine and the Czech Republic in this context.

Andrzej Duda made the corresponding statement in the Baltic port of Swinoujscie at the ceremony of signing an agreement on the allocation of funds for the expansion of the liquefied natural gas terminal. 60% of these works will be financed by the European Union.

According to Radio Poland, the terminal’s capacity is planned to increase from the current 5 billion cubic meters to 7.5 billion cubic meters of gas per year. According to the Polish president, much of this gas will come from the United States. Speaking in Swinoujscie, Duda stressed that last autumn Warsaw entered into an agreement with Washington for 20 years, providing for the supply of liquefied gas, equivalent to 40 billion cubic meters, and announced the signing of new contracts with US companies.

The head of the Polish state also linked the achievement of the future energy sovereignty of Poland not only with the expansion of the LNG terminal, but also with plans to build the Baltic Pipe pipeline, through which natural gas from Norway must flow to Poland through Denmark. The project on April 15 received EU funding in the amount of € 214.9 million.

The capacity of the new pipeline, which is scheduled to start in 2022, should be 10 billion cubic meters per year. According to the information portal Euractiv, the current level of natural gas consumption in Poland is 14 billion cubic meters per year.

In February, the representative of the Polish government on energy affairs, Peter Namsky, stated that Warsaw would not renew the long-term contract with Gazprom expiring in 2022. He also highlighted the role of the Baltic Pipe gas pipeline in the process of diversifying gas supplies to Poland. In the same month, US Ambassador to Warsaw Georgette Mosbacher announced that Poland would become the center for the re-export of American LNG to Europe.

As Igor Yushkov notes, from an economic point of view, all these projects are untenable, because even the LNG terminal operating in Poland is not loaded at full capacity. The reason is that it is simply not profitable.

“Everything depends on the economy, LNG is much more expensive than the existing Russian pipeline gas, so the Poles did not even use the existing terminal at full capacity,” the expert notes.

According to him, deliveries from Norway are unprofitable: gas production in this country does not grow, it is not cheap, and only the infusion of money from the EU budget can force companies to take on the Baltic Pipe.

“The big question is whether they can ensure the loading of the pipeline? - notes the expert. - But you still need to provide the same Ukraine with a consumption of about 10 billion cubic meters. But then the gas will simply not be enough and we will have to choose: to provide for ourselves or Ukraine, not to mention other neighboring countries. ”

According to the expert, in fact, Poland does not intend to abandon Russian gas, including gas coming from Germany, and simply strengthens its bargaining position before communicating with Gazprom.

We are talking about attempts to achieve discounts on gas consumed, and the desire to negotiate more favorable transit conditions for Warsaw of Russian fuel through the Yamal-Europe gas pipeline going through Poland.

  • Gas compressor station in Ukraine
  • Reuters
  • © Gleb Garanich

Ambitions and money

As Alexander Frolov, deputy director of the National Energy Institute, noted in an interview with RT, Poland will not be able to replace Russian gas with either American, Norwegian, or any other.

The whole struggle of Warsaw for the diversification of hydrocarbon supplies comes down to knocking out money from the EU budget for infrastructure projects and raising its political status as one of the most important energy hubs in Europe.

“This is the whole of Poland: on the one hand, imperial ambitions, and on the other, the desire to snatch money from the EU,” said RT Frolov.

Poland has traditionally been in favor of reducing the purchases of Russian gas by European countries, being one of the main opponents of the Nord Stream 2 project. Thus, on April 18, Polish Prime Minister Mateusz Moravetsky compared Germany’s purchase of gas from our country with the purchase of “President Putin’s weapons”. Washington supports Warsaw in this matter and offers Europe to buy its energy resources.

“Poland has itch imperial complex. With the help of energy projects, they are trying to increase the dependence of the surrounding states on themselves, ”notes Alexander Frolov.

According to the expert, Ukraine is the first candidate here. In 2017, the Poles have already tested the possibility of gas supplies to this country. And in principle, they can be beneficial for Poland and official Kiev, but not for the Ukrainian people, Frolov argues. Earlier, Prime Minister of Ukraine Volodymyr Groysman called on Naftogaz to look for cheap gas “all over the world.”

“For the Poles, it will be cost-effective. Although they will buy American LNG at exorbitant prices, Ukraine will be able to make a profit on sales to Ukraine, the expert notes. “It is important for Ukraine not to ensure its own energy security, but to show that they do not use Russian gas.” And here the Poles offer them a terrific PR move: to receive alternative Russian gas in the form of LNG, and even boast that it is gas from the United States themselves. ”

True, this project also has its pitfalls. It will take money to modernize the Ukrainian gas transportation system, and Kiev does not have it. At the same time, despite the loud statements, Ukraine continues to buy Russian gas. But it comes from European traders who, in turn, receive a percentage of resale and therefore are not at all interested in the appearance of competitors from Poland.

“If a pipe from Poland to Ukraine will be built, it is unlikely that more than 1 billion cubic meters will be pumped through it. “European companies reselling Russian gas to Ukraine also have their own interests, and they will not like the fact that Poland will try to take this margin away from them,” concluded Alexander Frolov.