Belarus turns away from Russian oil after quality scandal
By the end of the year, Belarus plans to start buying oil from sources outside Russia after oil with excess levels of chlorine put Belarusian pipelines and refineries on the brink of technological collapse.
Deliveries from alternate sources will come in from ports in the Baltic States and Ukraine, Deputy Director General of the Belarusian Oil Company (BNK) Sergey Grib said on Tuesday.
The company is considering suppliers from Saudi Arabia, Nigeria and Azerbaijan that have grades of a similar quality to the Russian Urals benchmark.
According to Grib, 300 thousand ton oil terminals are planned to be reserved in Lithuania and Latvia every month. Thus, Minsk will be able to purchase 3.6 million tons of raw material per year, replacing 20% of the deliveries it gets from the Russian Federation (18 million tons last year).
“The Mozyr Oil Refinery is closer to Ukraine ... it is quite possible that oil will pass through Ukraine. Naftan (another larger oil refinery) is closer to the Baltic ports so it would be logical to consider ports on the Baltic Sea,” Grib explained.
The situation that arose from the Russian oil delivery is still ongoing. On April 19, the Belarussian national oil concern Belneftekhim announced a sharp deterioration in the quality of oil as it contained more than 20 times the accepted norm of chlorine compounds.
They are capable of causing corrosion in both pipelines and refinery equipment. One refinery - Mozyr - reported an equipment damage on Monday. On Tuesday, Belarus was forced to completely stop the export of light petroleum products to Ukraine, Poland and the Baltic states, Grib reported.
It is currently impossible to assess the damage, said the deputy chairman of the Belneftekhim Concern Vladimir Sizov. The process equipment is hermetic so the internal state of the pumps and pipelines can be assessed only after a complete overhaul.
The source of the pollution was found in the Samara region in the Samara-Unecha section of the Druzhba pipeline which has been supplying oil and gas to Eastern European countries since Soviet times.
Trasneft announced a solution to the problem within a week. Yet, for now, to say that there has been an improvement to the supplied oil is premature, Sizov said on Tuesday, adding that the situation is still complicated.
“The problem is technical in nature and is unrelated to the issues being discussed with Belarusian partners about oil and gas sector relations in the medium and long term,” the Ministry of Energy of the Russian Federation clarified on Sunday, referring to the fuel conflict that began when Minsk pursued financial claims that ended with the threat to suspend the transit of Russian oil to Europe and to raise pumping rates by 23%.
Earlier, Belarus demanded Russia compensate its losses due to the tax maneuver that abolished export duties on oil with a simultaneous increase in mineral extraction tax. This would deprive Minsk of the opportunity to buy oil at a preferential price (duty free) and resell it abroad.
Numerous negotiations, including those between Vladimir Putin and Alexander Lukashenko - who brought three bags of potatoes to the Kremlin as a gift before the New Year - bore no results.
Since April 10, relations have escalated to the level of a trade war: The Federal Service for Veterinary and Phytosanitary Surveillance imposed a ban on apple and pear deliveries from Belarus which Minsk interpreted as a sanction.
If Belarus does not receive compensation for the maneuver, Russia could lose its only ally to the west, Lukashenko warned at a meeting with Putin.
Russia categorically refused to compensate Belarus for the losses. Tax policies are an internal affair in Russia, said First Deputy Prime Minister and Minister of Finance Anton Siluanov.