Oil producers in Kazakhstan have agreed to increase transit payments to Belarus next year as part of their ongoing efforts to help Germany replace volumes from Russia.
Belarusian state oil pipeline operator Gomeltransneft Druzhba is seeking approval for a 43% increase in the transit fee it charges to carry Kazakh oil from the country’s border with Russia to the Polish border at Adamowo-Zastawa from 1 January, 2024, according to news reports.
Moscow news agency Interfax said the current tariff for the Belarus’ segment of the Druzhba pipeline is set at just $0.68 per barrel.
In a statement to Upstream, Kazakh state-run oil pipeline operator Kaztransoil said that it received no notices from the country’s oil producers on any changes in earlier-approved shipping plans for next year.
Kazakhstan has no authority to influence the Belarus tariff, as it is approved by the Belarus Antimonopoly & Trade Ministry, the company said.
Kazakh oil producers, led by state-controlled KazMunayGaz, have said they plan to deliver close to 9 million barrels of oil via Russia, Belarus and Poland to Germany’s Schwedt refinery in 2024, according to Kazakhstan’s Energy Ministry.
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Kazakh oil enters the Russian oil pipeline network from the south and mingles with Russian oil as it flows to the country’s west.
As a result, Kazakh oil’s exit characteristics are the same as Russian heavy and sour blend Urals that were delivered to Poland and Germany via Druzhba before December last year, when the European embargo on Russian oil imports went into effect.
While Poland and Germany have arranged alternative crude supplies to their refineries, processing units remain mostly geared to the Urals blend, meaning identical Kazakh oil is often priced at a premium to the benchmark North Sea Brent, according to specialised oil pricing reports.
Despite the longer travel distance, shipping Kazakh oil across Russia, Belarus and Poland to Germany cost less last year than pumping it to the Black Sea port of Novorossiysk and the Baltic port of Ust-Luga.
According to Interfax, Gomeltransneft Druzhba is also seeking approval from authorities in Minsk to boost Druzhba transit fees to Hungary, Slovakia and the Czech Republic by 15%.
All three countries have received European derogations to continue pipeline imports of Russian oil via Druzhba despite the embargo because these countries have limited options to arrange supplies from alternative sources.
Ukraine — which Russian oil also has to transit after Belarus — last year increased shipping tariffs despite opposition from Hungary.
