June 19, 2015 [OPIS] - Poland is aspiring a place in seaborne crude oil trade and stronger bargaining power versus Russian suppliers with a new oil tank storage farm near a running terminal in the seaport of Gdansk, whose first phase is slated to become operational before end-2015, according to information from project leader PERN Przyjazn, the state treasury and contractors.
State-owned logistics firm PERN expects to bring 375,000 cbm of capacity for crude oil onstream prior to the turn of the year, with links to the adjacent Naftoport oil terminal that handles import and export trade, including Germany-bound transits. A second phase will add 325,000 cbm of space for oil products and chemicals, to be completed in 2018.
The initial phase will consist of 62,500-cbm tanks plus related infrastructure and the second phase of six 30,000-cbm tanks for fuel oil, four tanks for jet-A1 fuel and two tanks each for heavy fuel and methanol, said PGNiG subsidiary Gazoprojekt, which has been commissioned to prepare concept plans for the next stage after involvement in the first.
A European Investment Bank-funded environmental impact study from 2013 had seen 180,000 cbm assigned to store diesel, 66,000 cbm to aviation fuel, 50,000 cbm to heating oil and 26,000 cbm to methanol.
“In total, the terminal will be able to store 700,000 cbm,” according to Belgian contractor Geldof, which is currently building two of the tanks. “PERN Przyjazn Group will bring the Geldof storage tanks into use at the end of this year.”
The state treasury views the 826 million Polish zloty ($225 million/200 million euros) project as “an important component of the crude oil grid connecting the Baltic Sea with the Mediterranean Sea,” it said after a ministerial site visit in May, having depicted it earlier as “a gateway for the Polish and German refineries and traders operating in the Baltic Sea, as well as an important element of Poland’s energy security.”
PERN cited changed oil supply sources, more competition and “the complex geopolitical situation behind the eastern border” as project rationale.
On May 21, a delegation from Azerbaijan visited the port, agreeing on “cooperation between the two countries in the area of shipping,” according to the Gdansk port authority. The Caspian producer rose to become Germany’s fifth-largest crude oil supplier this spring.
Among the first users of the new Polish storage tanks will be Italian ENI, which signed a crude oil storage contract for 2014-2016, initially using PERN’s operating tank farm at Gdansk (Krakowiec), “yet at the end of 2015 or at the beginning of 2016 … [oil] will be kept at the new crude terminal in Gdansk,” according to PERN.
“[I]t is not a typical transit contract,” PERN said in an undated statement on the Polish-Italian deal. “[I]t opens completely new crude oil trading possibilities in our country. Besides purchase-transit-sale transactions, the Italian concern will also be able to reload the crude oil into PERN’s tanks, and after a certain period of storage, resell it to Polish or foreign clients. Exactly for such trading transactions the crude terminal in Gdansk is being developed.”
“[T]he development of the terminal is accompanied by increased foreign [client] acquisitions of PERN Przyjazn, which intends to define its future clients as well as services, which this sea hub should provide,” the logistics firm added.
Diversifying Crude Oil Supplies
Poland is heavily reliant on crude oil imports to feed refineries at Plock (PKN Orlen, 16.3 million mt/y, or 327,000 b/d) and at Gdansk (Lotos Group, 10.5 million mt/y or 210 million b/d), which mostly run on Russian export blend crude oil (REBCO).
“The country has limited possibilities for producing its own crude oil, but this terminal means Poland can now import crude oil from all over the world,” according to tank builder Geldof, which declined comment on further project details.
Russian and Kazakh oil supplies arrive via the Druzhba line at Adamowo on the Polish-Belarus border, from where the eastern section runs to Plock before extending to the German border to supply refineries at Schwedt and Leuna/Spergau.
The bi-directional Pomeranian pipeline links Plock with Gdansk, enabling supplies to Lotos’ refinery and exports through Naftoport but also seaborne imports into Poland and transits to Germany, thus providing an alternative route to supplies from the east.
PERN owns the 2,500-km pipeline network, linking three tank depots with over 3 million cbm of storage space for crude oil: at Gdansk/Krakowiec (900,000 cbm) near the Naftoport terminal, Plock (1.46 million cbm) and Adamowo (770,000 cbm). It has further capacity to store 1.8 million cbm of oil products and also operates product lines shipping output from Plock toward Warsaw, Poznan and Czestochowa, based on company data.
Naftoport can currently handle about 40 million mt/y of crude oil and 4 million mt/y of oil products, PERN said on its affiliate.
Russian blend accounted for nearly 92.5% of the Gdansk refinery’s feedslate, while the balance was made up with waterborne inflows through Naftoport, including “Rozewie” crude oil produced on the Polish shelf of the Baltic Sea. In late May, the company said it received domestic supplies by rail, treated at PGNiG’s Lubiatow gas and oil production facility, which came with low sulfur content and a large share of light gasoline fractions.
