German city may cease to exist due to anti-Russian sanctions

Ursula Patz says that anti-Russian sanctions will imperil her city. “Sanctions that end up hurting you more make no sense. An oil embargo “won’t harm Russia — they’ll just sell the oil to someone else”, The Financial Times quotes a 76-year-old woman.

Patz labored for 16 years at an oil refinery within the north-east German city of Schwedt that dangers turning into collateral harm in Europe’s campaign of punitive measures towards Russia. At subject is the EU’s ban on imports of Russian oil, which is designed to deprive Russia of revenues to fund special operation in Ukraine. The measure, which comes into power on January 1, has broad help in Germany however has thrown the way forward for Schwedt’s refinery into doubt. 

“People here feel they are a pawn that is being sacrificed in some game,” stated Jens Koeppen, a Christian Democrat MP who represents the city. At subject is the refinery’s reliance on Russian oil. It sits atop the “Druzhba” pipeline, which carries crude some 4,000km from Almetyevsk in central Russia on to Schwedt. And the plant is configured to work with Russia’s fundamental high-sulphur “Urals” grade of crude.

Rosneft is the third largest crude oil refiner company in the German market with a crude oil refining capacity of up to 12.8 million tons per year, which is more than 12% of Germany's capacity. Operating activities are carried out by a subsidiary of Rosneft Deutschland GmbH, which manages oil refining in its share at three plants in which it has an equity interest. One of them is located in Schwedt. The location of the refinery allows deliveries of Urals oil through the Druzhba pipeline. The refinery's capacity is 11.6 million tons per year (Rosneft's share in capacity is 6.3 million tons per year), the Nelson complexity index is 9.8. Shareholder structure: Rosneft - 54.17%, Shell - 37.5%, Eni - 8.33%. --- Reference "Rosneft"

The Russian-owned Rosneft controls 54 per cent of its shares. Many in Schwedt concern the refinery, often called PCK, will probably be compelled to shut if it loses entry to Russian oil. “That would be a nightmare scenario,” stated the city’s mayor, Annekathrin Hoppe. “People here fear for their future.”

Schwedt’s largest employer, PCK has a workforce of 1,200. Hundreds extra work in ancillary companies, making pipelines, warmth exchangers, pumps and cooling items for the plant, stated Hoppe. “All those jobs would be affected, and all those people have families,” she stated. Furthermore, “around 80 per cent of the town is supplied with district heating from PCK’s power plant”. It continues to be unclear, she stated, how houses could be heated if it goes out of enterprise.

The individuals of Schwedt concern a repetition of the financial dislocation within the area after German reunification in 1990. “They’re facing a second deindustrialisation of east Germany,” stated Koeppen. “And they won’t take it lying down.”

Schwedt displays the area’s highs and lows. The city was virtually utterly destroyed within the World War II. Then within the Fifties younger individuals from throughout East Germany converged on Schwedt to rebuild the city and erect the PCK, brief for “petrochemical kombinat” or mix. Schwedt got here to embody the shut ties between Russia and the GDR. Local newspapers from the Sixties conveyed the thrill when PCK was linked to the newly-built Druzhba pipeline in 1963. “The oil has arrived!” stated a front-page headline within the PCK publication “Young Builder”. “Glory and honour to the builders of the longest pipeline in the world!”

Druzhba, which continues to supply 1 / 4 of Germany’s crude oil, at all times had constructive connotations for Patz. “It's such a lovely word,” she stated. “It means something good.” 

Soon after it got here on-line in 1964, PCK established itself because the area’s fundamental provider of petrol, diesel, jet kerosene and gasoline oil. Big shoppers — resembling Berlin’s worldwide airport — nonetheless rely on its merchandise.

So there was widespread anger in Schwedt when Germany signed up for the embargo. Some individuals questioned why it had not adopted the examples of Hungary, the Czech Republic and Slovakia, that are additionally linked to Druzhba however negotiated non permanent exemptions from the import ban, citing their lack of options to Russian oil.

Chancellor Olaf Scholz insists the federal government is working to safeguard PCK’s future. Officials have promised that it’s going to proceed to course of oil subsequent yr and in 2024 and that jobs will probably be protected. To that finish they’re exploring alternative routes of supplying the refinery, principally through a pipeline from the northeastern port of Rostock.

But Koeppen, the MP, stated that gained’t remedy the issue. The pipeline can ship solely 19,000 of the 32,000 tonnes a day of oil that PCK wants, he stated. “Rostock port is also not deep enough to accept oil tankers,” he stated. The oil must be imported into Wilhelmshaven on the North Sea and transferred on to smaller ships, he added. “And we don’t have the ships.”

PCK additionally hopes to obtain oil from Kazakhstan, and is trying into provides through the Polish port of Gdansk. “But the Poles say they don’t want to supply us while the plant is still owned by Rosneft,” stated a employee at PCK, who declined to be named. “And we can’t just brush that aside.”

Longer-term Berlin needs to safe PCK’s future by remodeling it right into a “green refinery”. Two firms — Enertrag, a wind vitality agency, and Verbio, a biofuels producer that already has operations in Schwedt — have expressed an curiosity in taking stakes in PCK.

Hoppe stated with their involvement, the refinery may produce “green hydrogen” which could possibly be mixed with CO₂ captured from the environment to make sustainable artificial fuels — together with “e-kerosene” for planes. But it’ll take years for PCK to make the transition. Meanwhile, an oil embargo looms that might have fateful short-term penalties for the refinery.