April 29, 2019 / 12:55 PM / a year ago

UPDATE 3-Clean Russian oil has reached Belarus via key pipeline, Moscow says

* Belarus refineries running at reduced capacity

* Druzhba network supplies refineries as far west as Germany

* Says two weeks needed to fix issue across network (Adds detail)

By Andrei Makhovsky, Vladimir Soldatkin and Olga Yagova

MINSK/MOSCOW, April 29 (Reuters) - Clean Russian oil had reached the border with Belarus by midday on Monday, a Russian official said, five days after European refineries suspended imports because of contamination in the Druzhba pipeline.

Poland, Germany, Ukraine, Slovakia and other countries on the network suspended oil imports via the Druzhba pipeline after finding contaminants that can damage refinery equipment.

"As planned, at 1200 (0900 GMT) on April 29 oil ... has reached ... the Druzhba pipeline's Unecha border station," Ilya Dzhus, spokesman for Deputy Prime Minister Dmitry Kozak, said in a statement.

Belarus had earlier said that clean Russian oil had yet to reach its borders via the pipeline -- a major source of oil supply across Europe -- after tainted crude prompted several importers to halt flows last week.

State-run oil company Belneftekhim said that Belarusian refineries were still running at reduced capacity, though Moscow had said it would start pumping clean crude through the Druzhba network from Monday.

Negotiations with Moscow over Belneftekhim's oil supply will continue, one of its deputy chairmen, Vladimir Sizov, told Reuters as he left talks at the Russian Energy Ministry on Monday.

The Druzhba network supplies refineries as far west as Germany. Belneftekhim spokeswoman Marina Kostyuchenko said that clean Russian oil may reach the country later than Monday.

"For now, I don't see that it (oil) will arrive today ... Even if oil has reached the Russian side (of the border), time is needed (for it) to arrive to us," she said.

Moscow had also said on Friday that it would take two weeks to stabilise supplies across the Druzhba network, which has northern and southern pipeline spurs.

A source with a buyer at the northern Druzhba leg on Monday said that supplies via Adamova Zastava to Poland and Germany remained halted and were not expected to resume in the short term.


The problems arose when an unidentified Russian producer contaminated oil with high levels of organic chloride, which is typically used to boost oil output but which must be separated before shipment to avoid damaging refiners' processing units.

It remains unclear how contaminants got into the pipeline system near the Russian city of Samara on the Volga river.

"Clean Urals is about to reach the Belarus border, but it doesn’t solve anything. No solution. The situation is worse than it seems," an industry source familiar with the talks told Reuters.

Russia has not offered specifics about how it planned to clean out contaminated oil from the whole network. Druzhba can ship up to 1 million barrels per day, amounting to 1 percent of global crude demand.

Russian Deputy Energy Minister Pavel Sorokin told reporters in Minsk after Friday's talks that one option was to mix clean oil with the contaminated crude.

Another is to transport clean oil by rail tankers, Russian Railways said last week.

Some Western buyers last week refused to take Urals cargoes loading from the Baltic port of Ust-Luga, which also received contaminated oil. A port official and traders on Friday said loadings had resumed.

Traders working with the port told Reuters on Monday that loadings were continuing but the organic chlorides content in the crude was rising.

"It has reached around 200 ppm (parts per million) in cargoes recently loaded from the port," one trader said. The regular ratio is about 10 ppm.

Oil flows from nearby Primorsk as well as Novorossiisk and Kozmino in Russia's far east were not affected, traders said. In total Russia exports about 4 million barrels of oil per day.

Some European refineries have turned to supplies through other pipelines, but analysts say those routes have limited capacity.

Czech oil refiner Unipetrol has asked the government to lend it crude from state reserves, with amounts to be discussed at a meeting on Monday.

Russian pipeline monopoly Transneft is investigating the matter, Russian President Vladimir Putin said on Saturday, adding that this could lead to a wider inquiry, possibly including law enforcement agencies.

The pipeline issue has cut off a major supply route for Polish refineries owned by PKN Orlen and Grupa Lotos , as well as plants in Germany owned by Total , Shell, Eni and Rosneft.

Reporting by Andrey Makhovsky in MINSK, Robert Muleer in PRAGUE, Olga Yagova, Gleb Gorodyankin, Vladimir Soldatkin, Darya Korsunskaya and Maria Tsvetkova in MOSCOW Writing by Katya Golubkova Editing by Edmund Blair and David Goodman

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