BELARUS NEWS AND ANALYSIS

DATE:

08/01/2007

FACTBOX-Russia's Druzhba pipeline, one of the world's biggest

Jan 8 (Reuters) - Following are key facts about Russia's Druzhba (Friendship) oil pipeline to Central Europe, one of the world's biggest by capacity and length.

Oil supplies to Poland and Germany through the Druzhba were halted overnight in an increasingly bitter trade row between Moscow and Minsk, Polish officials said on Jan. 8. Flows from Russia to the Czech Republic have not been interrupted.

The Kremlin said on Jan. 4 that Russia had received official notification that Belarus had imposed a transit duty on its oil exports, but said it did not expect an escalating trade row to disrupt crude shipments to Europe.

The Druzhba pipeline is one of the largest parts of Russian pipeline monopoly Transneft's (TRNF_p.RTS: Quote, Profile , Research) system. It starts in central Russia and connects West Siberian oilfields to major refineries in Europe.

It has a capacity of over 2 million barrels per day (bpd), of which some 1.4-1.6 million bpd go directly to consumers in the European Union, while remaining volumes stay in Belarus.

GERMANY, POLAND:

The Druzhba pipeline splits into two legs with the bigger one, the northern leg, going to Poland and Germany.

Germany gets around 500,000 bpd of crude via Druzhba or one fifth of its total consumption. Refineries belonging to Total (TOTF.PA: Quote, Profile , Research), Shell (RDSa.L: Quote, Profile , Research) and BP (BP.L: Quote, Profile , Research) are among the biggest buyers of crude from Druzhba.

Traders say refiners could in theory replace purchases of Russian crude from Druzhba with imports from the Baltic Sea ports of Gdansk in Poland or Germany's Rostock.

But this would take time and the ports' capacities would not be sufficient as Polish refiners would also have to import crude via Gdansk.

Poland imports around 360,000 bpd of crude via Druzhba for domestic refining and exports another 170,000 bpd of Druzhba crude via Gdansk. Poland's oil consumption was 478,000 bpd in 2005, according to BP's Statistical Review of World Energy.

SLOVAKIA, HUNGARY, CZECH REPUBLIC:

The southern leg of the Druzhba pipeline supplies Slovakia, Hungary and the Czech Republic and has total capacity of over 400,000 bpd but is often under-used.

The Czech republic imports around 100,000 bpd via Druzhba, or half its consumption, Slovakia buys around 76,000 bpd from Druzhba, covering its entire needs, and Hungary imports 135,000 bpd, also almost fully meeting its demand.

LITHUANIA, BELARUS:

Lithuania, a former Soviet republic and now a member of the European Union, had also been getting around 300,000 bpd for its Mazeikiu refinery and Butinge export terminal on the Baltic Sea via the Druzhba pipeline.

But Russia suspended those supplies last year, blaming a pipeline leak. Analysts said the move was to punish Lithuania for selling the Mazeikiu refinery to Poland's PKN Orlen (PKNA.WA: Quote, Profile , Research) rather than choosing a Kremlin-friendly oil major.

Belarus itself gets around 400,000 bpd for its two refineries. Russia late last year imposed a crude export duty of $180 per tonne to bring a halt to a lucrative scheme in which Belarussian refiners made up to $4 billion a year by buying duty-free Russian crude and exporting finished products.

Belarus retaliated on Jan. 3 by imposing a transit charge of $45 per tonne on all Russian crude crossing its territory.

Source:

http://today.reuters.com/news/articleinvesting.aspx?view=CN&symbol=&storyID=2007-01-08T101845Z_01_L08812526_RTRIDST_0_BELARUS-RUSSIA-DRUZHBA-FACTBOX.XML&pageNumber=0&WTModLoc=InvArt-C1-ArticlePage3&sz=13