Moscow Officials Meeting In Minsk With Oil Firms To Discuss Druzhba Pipeline Cuts

Officials from Russia’s Energy Ministry are meeting in Minsk on April 26 with oil transport firms from Russia, Belarus, Poland, and Ukraine to discuss the contamination of Russian oil shipments through the Soviet-era Druzhba pipeline that has caused deliveries to be cut.

The ministry officials are meeting with representatives from four companies -- Russia's Transneft, Belarus' Belneftekhim, Poland’s PERN, and Ukraine's Ukrtransnafta.

Russia's Energy Ministry said in a statement on April 26 that it was working to resolve the contamination issue.

Belarus, Poland, and Slovakia stopped accepting shipments of Russian oil through the Druzhba pipeline on April 25, saying western buyers in Poland and Germany cannot accept or process the crude because it is contaminated with chloride.

Belarus on April 19 announced that the source of pollution was found within Russia along the pipeline’s Samara-Unecha section.

The Belarusian pipeline operator Gomeltransneft Druzhba described the interruption of deliveries as "indefinite."

It said on April 25 that it was continuing to send Russian oil to the Czech Republic, Slovakia, and Hungary through a different branch of the pipeline that passes through Ukraine.

But on April 26, after Slovakia announced it was no longer accepting Russian oil deliveries, Ukrtransnafta said it would stop transit through Ukraine.

Ukrtransnafta also warned of the threat of a "complete shutdown" of the Druzhba pipeline, the world's longest oil pipeline and one of the world’s largest oil pipeline networks.

The suspension of deliveries through Poland is preventing major buyers from receiving Russian oil through the Druzhba pipeline at their refineries in Poland and Germany -- including Poland’s PKN Orlen refineries and plants in Germany belonging to Total, Shell, BP, and Rosneft.

Western oil buyers say the suspension of oil flows could trigger a series of legal claims against Russian suppliers who, in turn, will likely seek compensation from Russia’s Transneft oil monopoly.

Belneftekhim’s deputy chief Uladzimer Sizou estimated on April 26 that losses were about $100 million.

Michael Lynch, an oil industry analyst who heads the firm Strategic Energy and Economic Research, called the disruption of Russian oil deliveries "quite strange."

Lynch said the chlorine contamination could be linked to "technical problems at a Russian refinery."

"It has caused some nervousness in the markets, but it seems the situation can be resolved rapidly," Lynch said.

Originally built to supply oil to the western parts of the Soviet Union and former Soviet bloc countries in Eastern Europe, the Druzhba pipeline is now the main export route for sending oil to Europe from Russia and Kazakhstan.

With reporting by Reuters, AP, Belsat, TASS, and Interfax