Reviving a key German refinery that was cut off from Russian crude supplies this year will take even longer as plans for upgrading an essential pipeline are stalling.
(Bloomberg) — Reviving a key German refinery that was cut off from Russian crude supplies this year will take even longer as plans for upgrading an essential pipeline are stalling.
The PCK Schwedt refinery in the eastern part of the country has withdrawn a grant application submitted in October for financing to upgrade an oil link from the Baltic port of Rostock, according to people familiar with the matter. A new funding request was expected about two weeks ago, though the Economy Ministry confirmed it hasn’t received one yet.
The pipeline from Rostock is thought to have the potential to revive activity at the refinery, a key supplier for Berlin, eastern Germany and parts of western Poland. It has operated at a lower capacity since the start of this year, due to a ban on Russian pipeline oil.
The German government has promised to spend as much as €400 million ($442 million) to expand the pipeline, and at one point even considered buying a stake in it in an effort to boost the country’s energy security.Â
Read more: Germany Eyes Stake in Oil Pipe From Baltic Sea, Says Habeck
The refinery — which has temporarily ceased operations for maintenance until mid-May — is currently able to source about 50 to 60% of its oil needs via the pipeline from Rostock, but the installation of flow accelerators on the link would increase that level to 75%.Â
Spokespeople for the refinery PCK Schwedt, as well as for its three shareholders Rosneft Germany, Shell Plc and ENI SpA, did not respond to questions on the status of the application and the reason for its withdrawal. The regulator Bundesnetzagentur — which is the trustee for the Rosneft entities seized in September last year — declined to comment.
–With assistance from Alberto Brambilla and Rachel Graham.
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