Kazakhstan sends first crude consignment for Germany into Russian pipeline system

Kazakhstan has dispatched its first consignment of crude for Germany via Russia's Transneft crude pipeline system, state-owned KazTransOil said Feb. 27.

In a statement, KTO said the first consignment amounted to 20,000 mt, and reiterated it had requested Transneft handle transit volumes to Germany this year of 1.2 million mt. The full-year volume equates to around 24,000 b/d.

On Feb. 25 KTO "delivered 20,000 mt of Kazakhstani oil to the system of Transneft... oil pipelines in the direction of the 'Adamova Zastava' oil delivery point [on the Belarus-Poland border] for further transit to Germany," it said, following earlier reports of delays to the delivery process.

Germany's imports of Caspian crude are part of its sourcing of alternative supplies after it stopped importing Russian crude under the EU sanctions regime introduced after the invasion of Ukraine.

The sanctions do not prohibit use of Russian pipelines for oil produced in other countries; Kazakhstan is not party to the invasion of Ukraine.

The crude is particularly intended for refineries such as the 230,000 b/d Schwedt facility in northeast Germany that previously relied on Russian crude imported via the Druzhba pipeline system.

The Schwedt and Leuna refineries did not order or buy any Russian crude for January, Germany's ministry for economic affairs and climate action said Jan. 9, vowing the refineries would make no further purchases of Russian crude.

Germany's energy regulator took over Rosneft's stakes in three refineries, including Schwedt, in September.

Kazakhstan's geographical position means it has no direct access to world markets. The Central Asian country rebranded its crude oil delivered via the Transneft system as KEBCO (Kazakh Export Blend Crude Oil) in June in light of emerging sanctions against Russia.

Kazakhstan already ships around 10 million mt/year (201,000 b/d) via Russia through the ports of Novorossiisk on the Black Sea and Ust-Luga on the Baltic Sea.

KEBCO-branded crude has gained popularity with the imposition of sanctions against Russia.

Platts, part of S&P Global Commodity Insights, assessed it at a $2.9/b discount to Dated Brent on Feb. 24, on a CIF basis.

Transneft did not immediately respond to a request for comment.