Druzhba Customers Rattled by Tainted Crude Fears

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Buyers along the 1 million barrel per day Druzhba oil pipeline to Europe were unsettled by news that Russian pipeline monopoly Transneft had detected poisonous organic chlorides in its trunk network. "Everybody buying crude oil via the Druzhba pipeline and at Ust-Luga [export terminal] is concerned," one of the international customers told Energy Intelligence, as the incident brought back memories of the 2019 debacle. Transneft said Jun. 28 that last week crude containing organic chlorides of 87, 46 and 94 parts per million -- compared to the maximum of 6 ppm -- was detected during several tests at quality control systems in the Volga region, forcing the company to stop shipments via the two trunk pipelines -- Samara-Lopatino and Kuibyshev-Unecha-2. Shipments were resumed after all the necessary works to prevent tainted oil shipments were carried out, the pipes and reservoirs were cleaned and tainted barrels were collected. Transneft said some 350,000 tons (2.562 million barrels) of contaminated crude was pumped into its system -- both pipelines and reservoirs -- and said the crude came from the Samaraneftegas subsidiary of state-controlled Rosneft. The country's oil champion was quick to deny the accusation and said further investigation was necessary. In 2019, contaminated crude also came from this region, but no oil company was officially deemed to be responsible for the contamination (NC Jun.17'21). Market players acknowledge that Transneft was this time "attentive enough" and acted promptly to avoid the spread of contaminated crude. In April 2019, contaminated crude in the Druzhba pipeline was first detected when it had reached Belarus. As a result, shipments via the pipeline to Germany, Poland, Ukraine, Slovakia, Hungary and the Czech Republic were halted for almost two months. Transneft is still paying compensation to Druzhba customers and Russian oil firms with a maximum fee set at $15 per barrel of contaminated crude. While this time Transneft managed to react quickly, customers say "the case is very alarming," especially as the contaminated crude allegedly came from Rosneft, the largest exporter along the Druzhba pipeline. Transneft used the current incident to recall that in 2019 it made an offer to intensify control over oil collecting points, including those belonging to majors and independents, but ran into opposition from the oil companies. Market players admit that the current incident raises further questions of intensifying quality control along the Transneft system to avoid incidents similar to the 2019 nightmare. The other issue is that control should also be intensified over the use of organic chlorides, which oil firms still use for various purposes, including intensifying production rates. Nadezhda Sladkova, Moscow

Oil Pipelines, Corporate Strategy , Crude Oil
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