Czech govt approves release of 330,000 t from oil reserve due to Druzhba pipeline shutdown

MOSCOW. Dec 5 (Interfax) - The Czech government on Wednesday approved the possibility of lending 330,000 tonnes of oil from state reserves to Orlen Unipetrol's Litvinov oil refinery due to the shutdown of the Druzhba oil pipeline, the head of the State Material Reserves Administration, Pavel Svagr said on social media.

The oil will be delivered only if supplies through Druzhba are not restored in the next few days.

The authorities are monitoring the situation and supply on the fuel market is stable, so there is no reason for a speculative increase in prices, Svagr said. If necessary, the government can release additional reserves, he said, adding that the country now has enough crude oil and oil product reserves for 86 days.

Orlen Unipetrol's website shows that the company has two refineries in the Czech Republic - Litvinov with annual capacity of 5.4 million tonnes and Kralupy - and both get crude from the Druzhba pipeline, the southern branch of which ends at the Litvinov refinery. But the refineries are also connected to the TAL pipeline, which runs from the Italian city of Trieste to Germany, and the IKL pipeline. The refineries can also process crude from local producers, which can be transported through Druzhba and by railway.

The Czech Republic stopped receiving oil through the Druzhba pipeline on Wednesday morning for unspecified reasons. Russian oil pipeline monopoly Transneft said oil is flowing normally through Russian territory.

Czech pipeline operator Mero said the country's "oil supplies are in no way at risk," as the "Czech Republic is prepared for these situations."

"In the event of a short-term supply disruption, there are strategic reserves of oil and petroleum products that would ensure the functioning of the country for 90 days. Supplies via the western route, namely via the TAL and IKL pipelines, are proceeding without issues," Mero said.

The Druzhba oil pipeline runs from Russia through Belarus, where it splits into northern and southern branches. The southern branch goes through Ukraine to Slovakia, from where branches go to Hungary and the Czech Republic.