Germany expects decision on Schwedt refinery oil supply next week – ministry

BERLIN (Reuters) -Germany expects to reach a decision next week on how the Schwedt refinery will be supplied as a ban on Russian oil takes effect, the Economy Ministry said late on Thursday.

Berlin aims to eliminate imports of oil from Russia by the end of the year, applying European Union sanctions, and has for months been working with Poland to secure supply for Schwedt, which provides 90% of Berlin’s fuel.

The two sides want to ensure Polish refineries in Gdansk and Plock as well as German ones in Schwedt and Leuna are adequately supplied with , ministers from both countries said earlier this month.

The two governments on Thursday met in Berlin to discuss how the two German refineries could continue to operate after the embargo on Russian oil comes into effect.

“Talks have been very good,” a spokeswoman for the Economy Ministry said in response to a Reuters query. “We are now evaluating the talks within the federal government and are currently expecting a decision from the federal government by the end of next week,” the spokesperson added.

At the centre of the talks is future ownership of Schwedt along with a logistical solution that would enable it to use non-Russian oil. Supplies via the Druzhba pipeline that feed Schwedt are exempt from the EU sanctions on Russian crude but Warsaw and Berlin pledged to ditch deliveries from Moscow from 2023.

Germany in September took control of the Schwedt refinery, which was majority owned by Russia’s Rosneft, as part of efforts to shore up the country’s energy supply.

It put Rosneft Deutschland under a trusteeship of the German industry regulator but Rosneft still holds 54.17% of the refinery.

Schwedt’s co-shareholders are oil major Shell (LON:) with a 37.5% stake, and Italy’s Eni, which holds 8.33%.

Germany and Poland this month signed a memorandum of understanding on oil logistics, which could unlock non-Russian flows and help Poland’s top refiner, PKN Orlen, pursue its interest in Schwedt.