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Business & Finance

Rosneft and Shell have not agreed on 2021 oil supplies to PCK Schwedt refinery

  • Under the previous contract, which expired on Dec. 31, Rosneft supplied about 100,000 tonnes a month to Shell, the offtaker for the refinery, via the Druzhba pipeline.
  • Rosneft holds a 54.17% stake in the 220,000-barrels-per-day PCK Schwedt refinery, while British-Dutch major Shell has 37.5% and Italy's Eni has a stake of 8.33%.
Published February 19, 2021
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MOSCOW/LONDON: Russia's Rosneft and Royal Dutch Shell have not agreed on a new Urals oil supply contract for their jointly owned German PCK Schwedt refinery, according to three industry sources familiar with the matter.

Under the previous contract, which expired on Dec. 31, Rosneft supplied about 100,000 tonnes a month to Shell, the offtaker for the refinery, via the Druzhba pipeline.

However the two oil majors have not agreed on contract terms for 2021 and Rosneft has not shipped Urals crude via the pipeline for Shell to supply the refinery so far this year, said the sources, who declined to be named due to the sensitivity of the matter.

The companies had reached a preliminary price agreement in late 2020, but have not moved forward with that deal, according to one of the sources.

Rosneft holds a 54.17% stake in the 220,000-barrels-per-day PCK Schwedt refinery, while British-Dutch major Shell has 37.5% and Italy's Eni has a stake of 8.33%.

Two of the sources said the failure to agree a new contract could be linked to Shell's plan to sell its stake in the refinery, adding that Rosneft was among potential buyers of the stake.

Shell declined to comment on the oil supply contract, but said it continued to follow its strategy of reducing its global refinery portfolio to six plants from existing 13. The six do not include the Schwedt refinery.

Rosneft did not respond to a request for comment.

According to Reuters estimations, Shell has to secure about 300,000 tonnes of oil a month for the refinery.

It has a contract with Sugutneftegaz to supply 120,000 tonnes per month, and has imported the remaining volumes via sea ports, traders said. So far this year Shell has imported two oil cargoes to supply the refinery, according to the traders, one via Germany's Rostock port and one via Gdansk in Poland.

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Rosneft and Shell have not agreed on 2021 oil supplies to PCK Schwedt refinery

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