Kazakhstan to Increase Monthly Oil Export to Germany via Druzhba Pipeline

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Kazakhstan to Increase Monthly Oil Export to Germany via Druzhba Pipeline

Flags of Germany and Kazahkstan (© Shutterstock/DexonDee)
Flags of Germany and Kazahkstan (© Shutterstock/DexonDee)

The state pipeline company of Kazakhstan, Kaztransoil, announced last Friday that it would boost the country's monthly oil export to Germany via Russia's Druzhba pipeline.

According to a report published yesterday by NewsTrack,  the company has claimed that two 20,000-tonne shipments of oil have been successfully delivered to Poland's Adamowo-Zastawa, before being transported to Germany's PCK Refinery in Schwedt. However, the volume of supply is currently below expectations.

Kaztransoil reached an agreement with Russian energy giant Transneft in January, allowing Kazakh oil exports to the EU, with a total of 1.2 million tonnes of pipeline capacity, including 300,000 tonnes in the first quarter reserved by Kazakhstan under the terms of the agreement for transit in 2023. Only 40,000 tonnes have been delivered so far.

Despite pipeline capacity being reserved for four times that amount, Kazakhstan's obligations to Germany for the entirety of 2023 only amount to 300,000 tonnes of oil, according to Bolat Akchulakov, the energy minister for Kazakhstan. Analysts have raised questions about Kazakhstan's ability to meet its commitments.

Kazakhstan produced 84.2 million tonnes of oil in 2022, with 90.5 million tonnes anticipated to be produced this year. Almost all 71 million tonnes of anticipated oil exports are reportedly under contract, making it difficult for Kazakhstan to reroute the oil without penalty.

Experts have stated that Astana "does not have additional free volumes of oil" to deliver to Germany. Even if they did, the 1.2 million tonnes set aside for Kazakh transit would only make up 10% of the 11 million tonnes of oil the Schwedt refinery needs to maintain operations.

Germany turned to Kazakhstan as a replacement oil supplier after the EU banned almost all imports of Russian crude oil in December.

Kazakhstan's oil has a similar chemical make-up to the Urals grade of Russian oil on which Germany previously depended, and Berlin believed that its existing Druzhba pipeline infrastructure would alleviate additional logistical problems.

However, analysts have cautioned that Kazakhstan may not be able to increase production enough to replace the shunned Russian supplies and is struggling to meet European oil demand.

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