PCK refinery: where the crude oil will come from in the future

The refinery in Schwedt will no longer process Russian oil – and will come under federal control. What does that mean for the oil supply in Germany? And where should the crude oil for the important location come from?

The road from crude oil to fuel at the pump is a long one. Without refineries – like the one in Schwedt in Brandenburg – the gas stations would soon be left dry. So far, the oil for the PCK refinery in the Uckermark has come from Russia via the so-called “Druschba” pipeline. The refinery in Schwedt is majority owned by the German subsidiary of the Russian state-owned company Rosneft.

Share of Russian oil has already fallen sharply

Now the federal government is getting involved. It put Rosneft Germany under state control, which means specifically: under a trusteeship of the Federal Network Agency. This happened in April in the case of the Gapzrom subsidiary Germania. “It is very important to maintain the functionality of these units. Be it in gas supply, gas storage – or in the processing of mineral oil,” says energy analyst Thomas Deser from Union Investment. “The functionality simply has to be maintained here, even in the event of financial bottlenecks or if the previous owners are unwilling.”

Refineries in Karlsruhe and Vohburg in Bavaria, in which Rosneft Germany also has a stake, are also affected. At the turn of the year, the import ban on oil from Russia, which the states of the European Union had agreed on at the end of May, will take effect. According to the Federal Ministry of Economics, Germany has already greatly reduced the share of Russian oil – from 35 to 12 percent. The refinery in Schwedt depends on this remaining part.

By ship via Rostock and Gdansk

It is hard to imagine that Rosneft would voluntarily resort to oil from other countries – hence the state intervention. A replacement must be purchased “to ensure that the products are passed on to the market, i.e. to the gas stations,” says Deser.

However, this replacement procurement is not a sure-fire success. There are discussions about delivering the oil for Schwedt by ship in the future – the Baltic Sea ports in Rostock and Gdansk in Poland could play a role in this. A tanker with US crude oil for Schwedt had already reached Rostock in August. The Hanseatic city is connected to the refinery via a pipeline. Deliveries from Kazakhstan, for example, could be transported to Schwedt via Gdansk and pipelines.

It remains questionable whether the quantities are sufficient to utilize the refinery to capacity. The Federal Ministry of Economics had recently hoped for a capacity utilization of at least 75 percent – through oil deliveries via Rostock and Gdansk.
Apparently, Poland made it a condition that the Russian Rosneft group no longer had any influence on the refinery in Schwedt.

Oil from the North Sea and the Gulf Region

According to the plans, the refinery in Leuna in Saxony-Anhalt, which is operated by the French energy group Total Energies, is to achieve a similar capacity utilization with the help of the Baltic Sea terminals. In the past, Leuna was also mainly supplied with crude oil from Russia via the “Druschba” pipeline. When it comes to switching to other suppliers, they are more advanced there than in Schwedt: According to the company, around half of the processed oil did not come from Russia last month – but from the North Sea or the Persian Gulf.

However, analysts still do not rule out the possibility of regional fuel bottlenecks. However, the price of petrol and diesel is likely to depend more on the global market and less on the conversion of a refinery. The oil market has recently suffered from the weakening global economy. The price for a barrel of North Sea Brent has fallen significantly in recent months. While a barrel of oil cost more than $120 in March, the price is now around $90.

With information from Sebastian Schreiber, ARD stock exchange studio.