Crude supplies to the Czech Republic via the TAL crude pipeline in southern Europe are set to resume at the beginning of November, a spokeswoman for the pipeline operating company said Monday, though additional volumes will only be supplied if there is sufficient capacity in the line.
Supplies to the Czech Republic's two refineries at Kralupy and Litvinov through the TAL and IKL pipeline network were suspended Saturday because of limited capacity in the system, Czech refiner Unipetrol said earlier Monday.
The TAL operator's general manager, Ulrike Andres, told Platts regular contract volumes were supplied throughout this year to the Czech Republic.
"They will continue to be transported, [with] additional volumes as per available pipeline capacity on TAL," she said.
She said the reason for the halt in deliveries to the Czech Republic was additional demand from plants served by the TAL network.
These are notably the Ingolstadt, Vohburg and Neustadt refineries in Germany at the end of the TAL line.
"It is increased demand from other refineries supplied from Trieste through TAL," she said when asked why supplies to the Czech Republic had been halted.
TAL also breaks off in a westward direction to feed the Miro and Karlsruhe refineries in southwest Germany and also links to the Schwechat refinery in Austria.
Oil trader Gunvor recently restarted the Ingolstadt refinery after it was idled by former owner, the now defunct Petroplus.
As a result of the TAL supply suspension, Unipetrol has opted to put the 62,000 b/d Kralupy plant into maintenance from October 25 for 10 days. Kralupy and the 100,000 b/d Litvinov plant are operated by Ceska Rafinerska, which is majority owned by Unipetrol.
CZECH NOMINATED VOLUMES EXHAUSTED
The Czech industry ministry told Platts the reason for the halt was that Czech refiners had already used up their nominations for 2012.
The Czech Republic has imported increased volumes through TAL since a pricing dispute with its main Russian suppliers earlier this year saw imports fall considerably through the Druzhba line.
According to official figures, TAL accounts for some 87% of oil shipments to the Czech Republic while the Russian Druzhba pipeline only ships 13% of the country's needs.
This reverses the long-term trend of 80% of oil deliveries arriving via Druzhba.
"To date the TAL/IKL pipeline was used a bit more often than in previous years," a ministry spokesman told Platts.
"This lead to the situation in which the Czech Republic-nominated year volume had been already reached," he said.
With supplies via TAL dependent on capacity, and supplies from Russia cut to small levels, Prague could face a supply shortage until the end of 2012.
Because it has received its contracted nominations for the year, a so-called "emergency contract" can come into force.
In November 2010, Prague secured a deal with the TAL pipeline to extend its contract on receiving additional oil through the link in the event of disruption to the Druzhba pipeline.
At the time, Czech pipeline operator MERO was given the right to use TAL pipeline capacity "outside the usual system of long-term commitments" and without an "exorbitant" extra cost. The new amendment to the contract is valid until 2015.
"In the emergency contract, the Czech Republic has the opportunity to exceed the year's nominations under certain conditions," the industry ministry spokesman said.
CRUDE RESERVES?
The spokesman said Czech refiners have "options open to them to deal with the current situation with no negative effects on the Czech industry."
Although the ministry said it would not intervene in the running of the refineries, it did have stocks available to be tapped.
"For any critical situation the state reserves system is in place, though there are, by no means, signals for its potential activation," the spokesman said.
