Czech state to lend Orlen Unipetrol refineries 200,000 tonnes of oil amid TAL supply curbs

Due to curbs on oil deliveries via the TAL pipeline, the state will lend 200,000 tonnes of oil from emergency reserves to refining company Orlen Unipetrol. Deliveries are currently restricted because of the modernization of a pier in the Italian port of Trieste, where the pipeline begins. The loan is intended to ensure uninterrupted supplies to the domestic market during repairs in Italy, which are expected to last until around mid-February. The government decided on the measure today, Pavel Švagr, head of the Czech State Administration of Material Reserves (SSHR), told ČTK. He said there was no risk of an oil shortage on the Czech market.

"The government has approved the release of 200,000 tonnes of oil from state material reserves for Orlen Unipetrol. The reason is restrictions on deliveries via the IKL/TAL pipeline. A pier is being modernized at the port of Trieste in Italy, restricting the movement of oil tankers. The repairs are scheduled to continue until mid-November," Švagr said.

"This loan ensures that supplies to the Czech market remain secure and that there is enough fuel. That means there is no reason to speculate about prices," he said.

He recalled that in the spring, the reserves administration had already lent domestic refineries four tankloads of oil after deliveries via the Druzhba pipeline were halted. "We used this situation to replace Russian oil with non-Russian oil. As a result, we have reserves for both refineries. Historically, the Czech reserves contained only Russian oil, which is processed at the Litvínov refinery," Švagr noted.

The SSHR is planning the same arrangement this time: the administration will lend Russian oil to the refineries and receive non-Russian oil in return.

Oil currently reaches Czechia only via the western route, through the Italian TAL pipeline and the connecting IKL pipeline. Until the beginning of this spring, oil also flowed into Czechia via the Russian Druzhba pipeline, but deliveries through it were halted at the beginning of March.

This did not jeopardize oil supplies to Czechia, however, as the TAL pipeline was expanded. The project, costing approximately 1.6 billion crowns, increased the pipeline’s capacity for Czechia by four million tonnes of oil per year from this spring, making it possible to deliver up to eight million tonnes to the country annually. According to the government, this enabled the Czech Republic to completely cut itself off from Russian oil.

The TAL pipeline begins in Trieste, where oil is imported from several countries and continents. The largest share comes from areas around the Caspian and Black seas, as well as from the United States and Africa.