Page 16 - bne_newspaper_May_03_2019

Eastern Europe
May 3, 2019 www.intellinews.com I Page 16
Russia opens criminal investigation in dirty export oil whodunit
bne IntelliNews
Russia's oil pipeline operator Transneft launched a criminal investigation into possible deliberate contamination of oil in Russia’s Druzhba pipeline to Europe, the company said on April 26.
Reportedly, the suspect company is the privately owned SamaraTransNeft-Terminal, part of the PetroNeft group that operates the section of the pipeline responsible for the contamination.
The quality of Russian Urals blend supplied to Europe has been questioned before, but the most recent dive in the quality led to many refineries in Belarus, Ukraine, Poland, and Hungary refusing the supplied crude, while Kyiv and Minsk were quick to calculate losses from the botched supplies. Minsk says it will lose $100mn from the hiccup.
Russian officials, in the meantime, urged that the problem not be politicised and tried to downplay the issue as merely a “technical problem.”
Now Transneft claims that oil was contaminated with a chlorine-containing solution and
pointed the finger at the obscure operator SamaraTransNeft-Terminal. Representatives of SamaraTransNeft-Terminal told RBC business portal that the company sold the pipeline link in question back in 2017 and was not to blame.
Sources told the Vedomosti and Kommersant dailies that four small suppliers could have injected low quality oil into the pipeline, but said there is no doubt that Transneft is ultimately responsible for the quality in the pipeline and will
The obscure privately owned SamaraTransNeft-Terminal oil company has denied responsibility for injecting 5,000 tonnes of contaminated crude oil into Russia's Transneft oil pipeline
bear any liabilities arising from the halt in crude deliveries. The pipeline operator checks the oil daily for excess water and sulphur, and for other contaminants every 12 days.
Other sources told Vedomosti that the circa 5,000 tonnes of low-quality oil in question could only have be injected in the pipeline through a pre- mediated operation.
Sources surveyed by Kommersant suggest that should a pre-mediated contamination have indeed taken place, it could have been an attempt to destabilise the fuel market, in particular
in Ukraine. It would take about 58 tonnes of chlorine-containing solution to contaminate the reported amount of low-quality oil.
Legal experts surveyed by the daily note that supply contracts usually very clearly state the liable party in cases of low-quality supplies, and it would most likely be Transneft.
Suspicions are high as Moscow has taken several measures recently to turn up the pressure on Kyiv following the recent election of Volodymyr Zelen- skiy in Ukraine’s presidential election. Russia has just banned oil and coal exports to Ukraine, which still imports some 80% of its coal from Russia, despite the undeclared war the two countries are fighting in the east. And in the last few days Kyiv and Moscow have started a “passports war”, offering the citizens of each others’ countries passports in tit-for-tat trolling that represented the end of Zelenskiy’s honeymoon period only three days after his election.