Russia opens criminal investigation in dirty export oil whodunit

Russia opens criminal investigation in dirty export oil whodunit
The obscure privately owned SamaraTransNeft-Terminal oil company has denied responsibility for injecting 5,000 tonnes of contaminated crude oil into Russia's Transneft oil pipeline / wiki
By bne IntelliNews April 29, 2019

Russia's oil pipeline operator Transneft launched a criminal investigation into possible deliberate contamination of oil in Russia’s Druzhba pipeline to Europe, the company said on April 26.

Reportedly, the suspect company is the privately owned SamaraTransNeft-Terminal, part of the PetroNeft group that operates the section of the pipeline responsible for the contamination.

The quality of Russian Urals blend supplied to Europe has been questioned before, but the most recent dive in the quality led to many refineries in Belarus, Ukraine, Poland, and Hungary refusing the supplied crude, while Kyiv and Minsk were quick to calculate losses from the botched supplies. Minsk says it will lose $100mn from the hiccup.

Russian officials, in the meantime, urged that the problem not be politicize and tried to downplay the issue as merely a “technical problem.”

Now Transneft claims that oil was contaminated with a chlorine-containing solution and pointed the finger at the obscure operator SamaraTransNeft-Terminal. The representatives of SamaraTransNeft-Terminal told RBC business portal that the company sold the pipeline link in question back in 2017 and was not to blame.

Sources told the Vedomosti and Kommersant dailies  that four small suppliers could have injected low quality oil in the pipeline, but said there is no doubt that Transneft is ultimately responsible for the quality in the pipeline and will bear any liabilities arising from the halt in crude deliveries. The pipeline operator checks the oil daily for excess water and sulphur, and for other contaminants every 12 days.

Other sources told Vedomosti that circa 5,000 tonnes of low-quality oil in question could only have be injected in the pipeline through a pre-mediated operation. Industry sources also claim that by April 29 the quality of the oil should go back to normal. 

Sources surveyed by Kommersant suggest that should a pre-mediated contamination have indeed take place, it could have been an attempt to destabilise the fuel market, in particular in Ukraine. It would take about 58 tonnes of chlorine-containing solution to contaminate the reported amount of low-quality oil.

Legal experts surveyed by the daily note that supply contracts usually very clearly state the liable party in cases of low-quality supplies, and it would most likely be Transneft. 

Suspicions are high as Moscow has taken several measure recently to turn up the pressure on Kyiv following the recent election of Ukraine’s president-elect Volodymyr Zelenskiy. Russia has just banned oil and coal exports to Ukraine, which still imported some 80% of its coal from Russia, despite the undeclared war the two countries are fighting in the east. And in the last few days Kyiv and Moscow have started a “passports war” offered the citizens of each others country passports in tit-for-tat trolling that represented the end of Zelenskiy honeymoon period following his election after only three days.

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