by Jorge Vilches for the Saker Blog
According to Ursula von der Leyen – President of the EU Commission – Europe today keeps buying Russian oil just to “deny Putin an even larger war chest” by preventing Moscow from offering such EU-purchased oil to the world market and “profiting from soaring prices” (?). Actually, the undisputable Law of Supply & Demand dictates the exact opposite So any stand-up comedian worth some salt would have found a better excuse. What Ursula von der Leyen should readily admit is that Europe will keep buying Russian oil for decades to come because of sheer self-interest. Europe cannot possibly avoid needing Russian oil and will not substitute it in any significant amount simply because the EU has no choice and no options no matter how it is diced or sliced. This article explains why and proposes an effective no nonsense solution to stop the coming European energy debacle. Early this century this was foreseen and planned out in thorough depth according to former German Chancellor Gerhard Schröder´s philosophy and policies which led to a clear and sustainable European strategy for energy sourcing and growth through strict association with Russia.
It is crystal clear by now that sanctions on Russia work against the EU and that the Ruble is stronger than ever, not weaker. So then, why more sanctions ? Some people wonder if the plan is to impose the Mother of All Suicides upon Europe. Others think that you are unfathomly incompetent. Or is it something else ? Public opinion needs to know. The fact is that Russia today keeps earning ever larger amounts of money from oil sales – even at discount prices – to friendly countries like China, India or Greek STS (Ship-To-Ship) loadings which you cannot possibly stop. But Russia also benefits from the higher price that you induce by promoting day & night an immediate EU Russian oil ban which would tremendously shrink the volume offered to the EU by the only remaining vendors thus ruining the supply side of the EU oil price equation. So it is you that´s prompting the higher oil price allowing Russia to actually sell less oil but making FAR more money just as EU close friend US Secretary of Treasury Janet Yellen had predicted.
Long ago, large fuel-consumer yet very fuel-poor Europe (Franz) married super fuel-rich Russia (Natasha) and together soon happily parented plenty of babies that have now grown-up and crave for Natasha´s delicious food.
So the whole European über-successful export-based business model was conceived, designed, built, operated and developed on the basis of the cheap and plentiful ´Russian fuels´ premise. That is why every EU government has repeatedly failed to find the architectonics — let alone effectively construct — a realistic energy strategy that does not depend exclusively on Russia´s capability as an EXTRA-ordinary and reliable commodities exporter, most specially fuels. Europe´s economic success has always been based — and continues to be — in having available abundant high quality Russian energy with the enormous advantage of smooth Druzbha pipeline 24x7x365 door-to-door delivery.
Hereinafter please find out why Europe has no choice other than to keep importing lots of Russian oil & gas.
It´d be technically impossible to do otherwise requiring a minimum of 20 years at probably more than twice the price, or even far more if the required monumental investments are priced in. Today, on the one hand we have the current Russian Urals blend oils which shall be briefly described herein. On the other we can now only have unknown Baltic oil blends that cannot be described because they do not exist and quite possibly may never exist, at least as needed. Actually, the only effective possibility would be to build from scratch ad hoc matching refineries and other chemical plants in order to accept still-undefined and most difficult to process Baltic oil blend feedstocks. You read it here first…
Ref # 8 https://www.pck.de/en/
Energy security involves complex interactive underpinnings which demand a clear and well-focused mindset. Accordingly, below please find a short list of requirements for European oil imports (90%) today mostly sourced in Russia and without which Europe would cease to exist as we know it with some countries becoming failed states.
For logistical reasons, the list below should later be expanded and adapted to the specific location of a given facility and/or other individual needs. A leading case in point would be the Schwedt Refinery as the largest in all of Europe and with a most special make-it-or-break-it importance as explained later. Without a fully functional and constantly well-supplied Schwedt Refinery, neither Berlin nor the immense surrounding Brandenburg state are viable… nor would the Berlin international airport and very large areas of Western Poland survive as they are today. I kid you not.
So banning Russian oil imports into the EU just for Schwedt would require modifying at least 3 Baltic ports + adding lots of complex new infrastructure + full modification of the Schwedt Refinery… with no guarantees it´d work out okay.
What comes next should sound unreal or nonsensical. Well, it´s probably both because engineering, economics, and even politics are fully against this Russophobic bananas ideology of unnecessarily trying to ban superb, cheap, fully proven, Russian oil delivered 24x7x365 on-demand in unlimited quantities by a modern door-to-door Druzbha pipeline
So now such Druzbha volume would have to come from several different sources, not just one. And that is why both the Gdansk port (Poland) and Wilhelmshaven port (Germany) are needed to supply the Rostock port terminals in Germany which, on their own, also need to be significantly modified for unloading larger inbound seaborne batch deliveries. Today, only Rostock berth No.3 is apt but very small, and enlargement of handling equipment & storage is also needed. Besides, the Rostock port pumping terminal to the Schwedt refinery pipeline ( both also to be modified ) needs to be serviced. But still Rostock terminals require to receive yet more volume from Wilhelmshaven + Gdansk + elsewhere yet undefined. So that means that both of these two Baltic ports in turn also need to be modified to receive and store larger imported seaborne batches… and also to deliver adequately to the Rostock terminal through special dedicated facilities to avoid contamination. But that would still not be enough to substitute current abundant and continuous Druzbha volumes so additional inbound deliveries of oil feedstocks into Rostock are needed from yet other sources via inland waterways + rail + heavy-duty roads and also into Wilhemshaven and Gdansk terminals… and even directly to the Schwedt Refinery. Clear enough ? A gloriously unnecessary logistics nightmare mess of sorts…
Just as a simple and very limited example – there are plenty more coming — the announced EU ban-Russian-oil plan now would have Germany dependent on Poland´s Gdansk port performance and only after the required modifications are made as they should be. Having a direct Polish dependency as a single point of failure 101 is the very last thing that Germany wants, leaving aside Poland´s territorial ambitions on Western Ukraine which would mean upholding its own priorities, not Germany´s. For example, right now Polish President Andrzej Duda has made public his resentfull disappointment accusing Berlin of breaching a deal to replace tanks that Warsaw sent to Kiev. Now do Germans at large know about any of these arrangements for the Gdansk port in Poland and the Russian oil that their Schwedt Refinery needs ? Will German people access the contents of, for example, my 3 specific articles on this topic giving intricate details of the direct and tremendously negative impact coming upon their livelihoods real soon for absolutely no reason ? Did any of them vote for Ursula von der Leyen ? Who exactly will be held responsible for this debacle ?
definitions + reservoirs + investments + price + quality + quantity + delivery + refinery feed + refineability + matched & mated + first-hand SKovacs + vendor references + length of contract + compliance + HR Human Resources + financing + 11 pending projects + final comments
Please get used to the fact that Russian Urals oil is always simple, easy, direct, understandable, decades-proven, fully vetted, no nonsense, smooth door-to-door modern Druzbha oilpipe on-demand continuous non-stop practically unlimited delivery , 100% reliable, homogenous, no risk, foreseeable schedule compliance, etc. etc. A beauty…
Also, on the contrary, please accept that anything related to Unknown Baltic oil is wishy-washy-iffy, does not even exist, it will mean an engineering-chemical-logistics nightmare that does not bode well, and which will probably and necessarily be heterogenous with batch to batch variations, etc. etc. Below we shall also refer to the Schwedt Refinery the leading case as the largest and most politically important refinery in all of Europe.
- Russian Urals oil = fully-proven decades long all-around compliance, is an EU special mixture of heavy sour oil from the Ural and Volga region mixed with light API oil of Western Siberia per 9.8 Nelson Complexity index
- Unknown Baltic oil = to be batch delivered at 3 possible different Baltic ports ( two in Germany and one in Poland ) most probably a discontinuous and/or unreliable feedstock of non-viable and/or variable-quality non-Russian blends, from yet unknown & unvetted vendors requiring nightmarish plant process modifications.
the Schwedt Refinery – a leading case
Schwedt is the largest refinery in Europe, a monstruous troglodyte so big that only T-Rex Russia can feed it, trust me.
The 2023 deadline means that ALL of Europe should now be doing the same as the Schwedt Refinery. Impossible.
Otherwise, rushing the Schwedt Project would be for showcase purposes only. Still, beware because it should also fail
Russian Urals oil = enormous, well-known, geologically & physico-chemically stable reservoirs, reliable, well studied.
Unknown Baltic oil = unknown, experimental mix from ocassional “beach-front bazaar” vendors variable in time, not well coordinated. Venezuela oil, not good. Middle East oils, not available. Will North Sea supply ALL of Europe ?
In a nutshell, the world wasn´t anywhere nearly prepared for an EU ban on Russian oil… or other Russian fuels…
Russian Urals oil = NONE, zero, perfect as it is, fully amortized, constant excellent proven performance, fully vetted.
Unknown Baltic oil = 11 (eleven) new projects, please see details below. Very expensive with pending financing and uncertain results, even with a very complicated project at Poland´s Gdansk port facilities. Way behind schedule in any and every sense as it would take the 6 announced months just to get the paperwork started, let alone bids & contracts & sub-contracts awarded. Start-up date maybe deep in 2023. This item is a clear indicator both of (a) the poor strategy followed and also of (b) the enormous TIME that this messy mess would require if ever finished. This is so lengthy and cumbersome that it will be explained below necessarily at the very end under the “11 pending projects” chapter.
Russian Urals oil = cheap, unbeatable, un-subsidized, already fully amortized facilities, un-expensive operation
Unknown Baltic oil = unknown, but definetly FAR more expensive with terrific freight, logistics, and final delivery costs.
Not low enough – let alone very high prices — means disrupting the EU and the world with inflation beyond imagination
The unit price would not include pay-back amortization or the many huge investments / modifications / reforms made.
Also an EU Russian oil ban would tremendously shrink the volume offered to the EU by the only remaining vendors thus ruining the supply side of the EU oil price equation. The much lower the supply, the MUCH higher the price.
Russian Urals oil = proven, fully vetted high quality homogenous blend, low in sulphur, light- intermediate API gravity.
Unknown Baltic oil = UN-known, clumsy totally limited sketchy game plan to find new well-coordinated set of suppliers with huge logistical problems. No Pre-Feasability studies let alone full-fledged, thorough Feasibility studies with written duly signed Report prepared by internationally-acknowledged consultants. A lower oil quality means poor performance and operational risks with serious breakdown troubles and injuries plus down-time probably beyond repair.
Russian Urals oil = unlimited, smooth, on-demand, almost immediate door-to-door delivery thru the Druzbha oilpipe.
Unknown Baltic oil = (?) Chances are that there is no enough volume available, not even in Africa, let alone Iran. It´d also have to be “incremental” export volumes beyond current production for two reasons: one would be potential growth in EU demand and the second reason is that no vendor will leave traditional customers abandoned high & dry just because the EU has now gone bananas. Furthermore, these contracts could might all turn out being short-term ephemeral un-sustainable ´purchases of convenience´ without continuity to be dropped the instant the EU´s “ban Russia´s oil” stops dead in its tracks for plenty of good reasons and thus discarding this nonsensical idea altogether. Not enough and well delivered quantity means degraded European livelihoods and failing economy, with shut down plants and refineries affecting transportation, heating, hospitals & schools, military, government, private business, massive unemployment, etc. Politicians are illiterate in the language of physics… and geology also for that matter.
Russian Urals oil = cheap, clean, proven,safe, indefinite non-stop 24x7x365 smooth door-to-door Druzhba on-demand pipeline delivery, just one phone call away from saying “send us more”. Today the Druzhba pipeline elegantly, silently, and reliably delivers the extraordinary Russian Urals blend to German satisfaction and in huge open amounts while the Schwedt refinery processes and distills to perfection without any need of modifying or retrofitting anything…
Unknown Baltic oil = only seaborne batches with discontinuity risks re shipping lanes, piracy, weather, lack of tankers, Suez Canal & vessel size limitations, piracy, warfare, labor conflicts both on board and/or on the docks /berths, draft issues, not enough water depth for Suezmax oil tanker in the Baltic Sea channels and ports. What capacity should all the terminals have vis-á-vis the renewed pipeline to Schwedt ? Nobody can know yet thus worsening timing demands.
No batch system in the world no matter how well designed and built is comparable to a door-to-door pipeline.
Tankers have a costly service life if only for the regulation/inspection requirements. So they are a higher risk and higher cost. Also with negative seasonal availabilities of hydrocarbons and shipping vessels types and sizes which means lots of negotiation, coordination, funding, expertise, risk, new fixed and variable costs and surprises from yet unknown trade and business partners, new procedures, modus operandi, brokers, insurance companies, etc., etc.
Russian Urals oil = door-to-door Druzbha pipeline, smooth, well-proven, guaranteed, no weather, no delays, nothing.
Unknown Baltic oil = complex and risky feed from seaborne batches unloaded after coordination with the three Baltic ports (Wilhelmshaven and/or Rostock and/or Gdansk – Poland) plus yet undefined transfer process to Rostock terminal plus dedicated storage and further handling at Rostock terminals for yet-undefined transfer process to the Rostock-Schwedt pipeline still to be revamped and upgraded for final delivery to Schwedt. Lots of moving parts…
Russian Urals oil = efficient, reliable with excellent guaranteed performance for decades in this Schwedt CPK Russian Rosneft-owned 233,000-bpd facility per Nelson Complexity Index of 9.8 allowing to refine with excellence a range of products including petrol (gasoline) diesel, aviation turbine fuel, LPG, extra light heating oil, heavy fuel oil, bitumen, benzene, toluene, xylene and sulphur. The Schwedt refinery needs to keep working always with the same excellence.
Unknown Baltic oil = fully unknown, risky, requires carefull constant testing of all-around refinery modifications (details on that later) adapting internal processes to new yet Unknown Baltic oil blend required to remain constant for at least 30 years, preferably 50 years. No data possible yet. Lots of work yet to be done. Refinement process jeopardized, final distillates quantities and qualities unknown. Politicians do not understand the language of chemistry either.
matched & mated
Refineries are very closely matched and subtly calibrated to very specific and foreseeable supply feedstocks which are also very difficult to substitute and with great uncertainty regarding the final outcome such as in this case. Changing anything either on the refinery side as well as on the feedstock requires lots of time, effort, money, dedicated facilities, experimentation, mistakes, trial & error, specific expertise, risk, and most important fixed, unchanging feedstocks always complying with specs. Substituting the quality and humongous quantity of Russian oil feeds has never ever been attempted. It´s not a “plug & play” substitute. It´s not like dog food you can change at will.
This means that Russia today supplies Europe with specific Urals oil that would be almost impossible to get from unknown third parties fast enough and cheap enough in enormous quantities. A very delicate and tight matching has already achieved between European facilities and reliable and vetted Russian oil vendors and other inputs that cannot be altered or replaced, let alone all at the same time (!!) or else… So another factor is the “sudden death” moment, no possible easy-does-it slow and smooth transition phasing out the Russian stuff one at a time and gradually phasing in our new whatever stuff… It´d be like trying to change a tyre as you keep driving without ever stopping the car okay ?
Ref # 13 https://www.ifo.de/en/node/69417
Many EU refineries have been built to process certain types of oils found in Russia. The very design & build of these refineries was based on certain specific oil types within narrow variation in blend/quality and steady supply — variation normally of less than 15% vol/day — guaranteed for over 30 years (most commonly 50+ years). Obviously enough, the continuous supply of quality feeds is critical to the operation of a refinery or any chemical plant.
Adapting an EU refinery to new types of oils requires detailed laboratory knowledge of the new blend with constant composition and formal guarantees for its continuous delivery for decades, convoluted & lengthy contracts and procurement processes, extremely detailed engineering plans, manufacturing of parts, shipping, installation, testing, commissioning, optimization, permitting etc. etc. etc. before it can be declared “done”. Any element of this incomplete list, if missing, renders the whole affair a failure both technically and economically.
The above assumes guaranteed efficient and continuous shipping and receiving network(s) are always in place and fully operational (!) Such work involves thousands of people, complex processes and of course many billions of euros, regulatory permitting process, inherent lawsuits etc., i.e. A LOT OF TIME – years ! A Europe now deprived of oil&gas + metallurgical coal from Russia — and also iron ore — is unlikely to build much. Never mind the finer components that require other alloy metals which are also provided by Russia… Ref # 14 https://thesaker.is/europes-mad-ban-on-russian-oil/
Russian Urals oil = proven, well-known, fully vetted, close-by, one-stop, well “oiled” 6-criteria compliant vendor.
Unknown Baltic oil = new unknown, unvetted, experimental, not-coordinated, variable, probably a changing group of partial vendors, with never well-coordinated and changing business associates at every stage of the project from the well-head to Schwedt Refinery. Located far away possibly with a “beach-front bazaar” structure, necessarily with seaborne delivery only, shipped by a yet-unknown fleet too small for purpose with several single points of failure..
length of contract
Russian Urals oil = 50+ years, Made-In-Russia will be missed.
Unknown Baltic oil = can´t know, but for decades-long contract requires mammoth reservoirs such as Russia has
Russian Urals oil = already 100% compliant, up and running smooth like a finely-tuned Stradivarius violin
Unknown Baltic oil = all compliance pending, approval takes years with plenty of EU bureaucratic requirements starting with ISO 9001 (manufacturing) + ISO 14000 (environmental) + ISO 15000 (laboratory analysis quality) approval of which starts only AFTER full design and complete specifications are satisfactorily concluded and internally approved for submittal to EU regulators. EU´s Green Deal spirit and wording must be complied with., same as other EU Common Policies in force. And always working with safe and ecofriendly practices. Environmental impact assessments have to be completed, presented, approved, permitted and commissioned. Also any strikes or labor union problems and issues would have to be fully avoided, with 24 x 7 activities no week-ends, no Christmas.
HR Human Resources
Russian Urals oil = 100% contracted and working fine: operational personnel, field hands, staff & management, etc.
Unknown Baltic oil = probably the WEAKEST link with tons of people missing with yet to be defined job descriptions, yet to be interviewed, hired, trained, teams put together, deployed, etc. etc. Current operational and maintenance + staff & field personnel would probably demand being switched to other jobs… or will drag their feet… or would simply resign thus necessarily compounding the problem to unchartered depths. New, young, inexperienced hands do not help under these circumstances. Many oldies will be called back from retirement, read my lips. New managers and all sorts of office & field personnel from logistics to IT contractors, welders, etc. will not even be hired by December 2022.
Russian Urals oil = NONE needed, zero, no new projects or investments just normal operational & maintenance costs
Unknown Baltic oil = ??? many many dozens of billions of euros need to be financed for these projects. Banks agree ?
11 pending projects
Russian Urals oil = NONE, zero, just deliver the goods and collect the Rubles
Unknown Baltic oil = Summary of the ´Krautensuiciden´ agenda per 11 pending projects
The Schwedt Project faces 11 highly challenging, simultaneous & parallel projects all to be executed in 6 months (?)
All forcefully mind-boggling modifications to adapt it to new and fully unexpected non-Russian feedstocks.
- Wilhelmshaven + Gdansk : dedicated storage + equipment for frequent inbound seaborne batch deliveries
- Wilhelmshaven + Gdansk : dedicated logistics for outbound deliveries to Rostock port storage terminals
- Rostock : berth revamping for larger seaborne inbound oil tankers from Wilhelmshaven, Gdansk or elsewhere
- Rostock : dedicated storage facilities + handling equipment for larger, more frequent seaborne batches
- Logistics for internal delivery via inland waterways + rail + road inbound to both W. + R. storage terminals
- Rostock port – Schwedt Refinery: pipeline upgrade & revamping + modifications to receive Rostock feed
- Schwedt Refinery: new oil feedstock definition, testing and vendor selection, approval, certification & contract.
- Schwedt Refinery: retrofit and revamping modifications per Option (3) described herein later.
- Schwedt Refinery: enhanced storage facilities + handling equipment for large deliveries from wherever
Actually it´s 11 (eleven) simultaneous projects just to MAYBE have a lower-rated substitute of what Schwedt already has today… only that at a MUCH higher price… plus the high cost of all the unnecessary 11 simultaneous projects which will require lots of negotiation, coordination, funding, expertise, risky modifications, new fixed and variable costs and surprises from yet unknown trade and business partners, new procedures, brokers, insurance companies, etc.etc.
- 95% completion is not enough, only 100% is satisfactory
- Everybody else in Europe doing the same things at the same time with the same deadline (!!!)
- Schwedt Refinery has to necessarily perform exactly the same as today
- The Schwedt refinery is majority-owned by Russian state-owned company Rosneft not very eager to refine non-Russian oil. So a legal “solution” needs to be found, possibly outright confiscation = TIME
- + (2) Wilhelmshaven + Gdansk ports require new dedicated storage + handling equipment for (supposedly) frequent inbound seaborne batch deliveries that need to be downloaded onto dedicated storage tanks while awaiting for delivery to Rostock port oilpipe terminals. Such facilities do not exist today. Neither associated logistics and related systems, yards for either trucks or train freight to Rostock port oilpipe terminal for final delivery to Schwedt refinery. Trucks, trains, heavy-duty roads, rails, offices, IT systems, etc. also required.
Wilhelmshaven is a large deep-water well-furnished port apt for inbound seaborne batch deliveries located some 400 km. away from Rostock port by land and 1000 km away by boat which is not anywhere “close-by. Gdansk is an equivalent and alternative well-equipped port but located in Poland some 600 km. away by land. Still, Gdansk would need to undergo improvements similar to Wilhemshaven adapting to Rostock new needs.
- + (4) Rostock port : is a not-fit-for-purpose port with only tanker berth No. 3 which accepts crude oil so handling & capacity is now very limited and thus also needs upgrading and retrofitting of equipment plus dedicated facilities including storage, handling and delivery capabilities. Also, Long Range (LR) 2 vessels
are the maximum size accepted by this Rostock berth, thus limiting crude unloading volumes by each vessel.
So Rostock needs berth redesign and revamping for larger seaborne inbound oil tankers coming from Wilhelmshaven and/or Gdansk or directly from yet unknown oil vendor from overseas. Also required are dedicated storage facilities + handling equipment for larger, more frequent seaborne batches + batches received from Wilhelmshaven and/or Gdansk plus delivery systems to oilpipe terminal for final delivery to Schwedt refinery. Such facilities do not exist today. Rostock may also even have to partially supply other
key refineries such as Leuna (Leipzig) and Plock ( Poland). Can´t make this stuff up…
- Additional logistics infrastructure for internal delivery of oil batches from elsewhere via inland waterways + rail + road inbound to both Wilhelmshaven + Rostock oilpipe terminal for final delivery to Schwedt refinery.
- Rostock port terminal to Schwedt Refinery: 200 km. pipeline upgrade + revamping on a partially-buried heavy structure built with obsolete materials and technology commissioned in 1963 and already repaired many times. The pipeline trace goes through highways and urban areas represented by very opinionated politicians. Also goes through pristine environments, rolling hills, valleys and ridges, forests, rivers, lakes, home to fish and wildlife with strong winds, rain and snow. Most probably unable to be “pigged”-inspected properly or meaningfully.This 60-year-old Soviet-era structure most probably cannot be revamped or retrofitted or pressurized as needed by 21st. century standards. Lots of skeletons hanging inside many closets after several decades, now to be opened. Still needs to be 100% functional with 60% increased flow-rate capacity
- Schwedt Refinery: new oil feedstock definition. This means to find, negotiate, plan for, test, approve, certify, contract & schedule fully compliant Russian-oil substitutes which should not be discontinuous and/or non-viable and/or variable-quality blends.This would also require yet unknown vendors to duly coordinate amongst themselves (?) to continuously deliver constant huge quantities and quality of Baltic oil exactly per required and contractually agreed specs. Batch-related problems to be expected, not comparable to pipeline feedstock.
No batch system in the world no matter how well designed and built is comparable to a door-to-door pipeline.
- Schwedt Refinery: retrofit and revamping modifications per Option (3) which means to modify every single internal system and process for a new blend of different non-Russian oils… machinery, engines, etc. — everything powered by fuels really — for individual, specific not-interchangeable non-Russian oil substitutes which would all be slightly different at the very least and expensive. and with no possible “toggle switch” to convert from one type of non-Russian oil blend to another. No meaningful contamination possible !
So it´s the case of a forceful life-long linkage between one group of vendors and their supposedly constant, homogenous and very large oil deliveries, which would be different from other groups of vendors and their supposedly also constant deliveries made to other EU refineries different from Schwedt. NO interchangeability is possible. So each refinery would need to have it´s own specific oil blend, which means separate, isolated, dedicated storage and delivery means. In sum, this Option (3) means to fully and definitely modify/retrofit all the Schwedt Refinery´s internal processes to enable the refinement of non-Russian oil blends which would now be received from multiple yet unknown experimental vendors that would supposedly continuously unload batches at the Wilhelmshaven & Rostock & Gdansk ports terminals in the Baltic Sea. The switch-over procedure by which the Urals oil would be phased-out and the Baltic oils phased-in is still an unfathomable mystery. It´d be like changing a tyre without ever stopping the car going at 100 kms. per hour…
- Schwedt Refinery: enhanced storage facilities + handling equipment for inbound deliveries from wherever
By the required Option (3) the Schwedt Refinery needs modification of new feedstock lines and infrastructure, an atmospheric distillation facility, a vacuum distillation system, a cat-crack unit, a visbreaking facility, an alkylation unit, a catalytic reformer, an isomerisation unit, and an ethyl tertiary butyl ether (ETBE) facility. Plus brand new storage facilities + handling equipment for Rostock feed to substitute the 24x7x365 smooth Druzhba pipeline. Not easy to do all that in 6 months ! … rather 6 years? Contractors and third parties everywhere. I foresee plenty of claims & lawsuits.
This re-vamping and retrofitting of everything will require an enormous effort that will consume humongous amounts of euros, human resources, expertise, trials & errors, risk and lots of hard work and lots and lots of TIME we do not have.
PLUS all sorts of sensors, software & firmware modifications or possible purchases of new stuff (!!) which mean that the IT Department, just for oversight purposes, most probably will have to hire new personnel (most preferably grey-haired if available ! ) and contract third party vendors… all of that in 6 months time…while all of Europe is necessarily doing the same while 95% compliance is not enough, only 100% serves the purpose. Sheer suicidal madness…
Any minimally experienced person that only knows some basic chemistry and process engineering concepts would understand that it should be absolutely unnecessary to continue describing the head-on technical & practical crash that the whole of Europe would be facing simultaneously, because the idea is to ban all Russian oil imports as of 2023 both seaborne and pipeline delivered, Hungary or no Hungary.
By the way, Option (3) would have to cover absolutely 100% of all the EU current and future oil consumption. So the EU should necessarily replace ALL the Russian oil Europe could possibly ever consume, NOT just a part. Because Russia now has other priorities and will no longer cooperate with and adapt to EU needs and timing in any way. So forget about gradual Russian oil substitution. It´d be the opposite Ursula. For example, and just to entertain the idea, even if eventually achieving constant delivery of 75% fully-compliant non-Russian oil… it´d still mean digging a 25% deep hole into Europe´s economy, which Russia will not help to solve by supplying the missing 25% oil.
Schedule non-compliance would hurt Europe badly and possibly leading to outward chaos by continuous damage beyond repair of machinery, processes, sensitive devices and installations that EU plants currently have in place.
So the goal is to modify all current European chemical plants and refineries by adapting them to whatever feeds of whatever quality and variations are effectively found, contracted and delivered by non-Russian vendors willing and able to deliver to Europe in enough quantities and qualities even under current circumstances. Oh, by the way, remember that this would have to be done simultaneously throughout Europe at every single refinery at the same time. Otherwise the 2023 deadline would not be met. So let´s start to modify, adapt, retrofit European refineries, chemical plants, equipment, etc. etc. for non-Russian substitutes of unknown origin with yet undefined all-around characteristics nor vendor track record. These oils would all be slightly different (not interchangeable) and definitely FAR more expensive mostly seaborne delivered to yet unmodified ports, berths, storage facilities and handling equipment. No “toggle-switch” possible for alternate feed of different oils to the same piece of equipment.
Also this mammoth undertaking would have to be done without Russia´s accommodation meaning it´d be utmost difficult to phase-out of Russian Urals oil as gradually as needed while new non-Russian blends phase-in… while the rest still awaits modification thus still requiring Russian oil grades which Russia would not supply in the way that Europe would need to keep importing. Russia would have other priorities, not accomodating for European needs.
So such very dangerous Russian tango should be hard to dance about and may end up like the Mother of All Suicides
Option (3) requires executing the above modifications to every single European oil-consuming and/or processing plant – refineries included — at the very same time and with the same deadline 2023. So it´d mean to fully and definitely modify/adapt/retrofit all the internal processes to accept non-Russian oil blends from yet unknown vendors that for Schwedt Refinery at least would supposedly continuously supply their viable quality batch-loads at the Wilhelmshaven & Rostock & Gdansk ports terminals in the Baltic Sea. Each of these yet unknown vendors requires negotiation, contracting, planning, testing, scheduling, delivery, certification, commissioning and payment of much higher prices.
And if EU politicians don´t know or don´t care they´ll still very soon participate front and center in a fast & furious crash course on basic high school chemistry that will turn their faces pale, I promise. Hungary has publically exposed the problem: “the EU has ‘no solution’ to fix damage from Russian oil ban”. Also promised, history will not be kind with the EU leadership both for absent fuels and everyday consumer staples with “prices out of the solar system”. The EU relies on cheap and efficient Russian energy for many things such as transportation, heating, and electricity. The drop in supplies will lead to blackouts, shutdowns in industries and unemployment pushing inflation to unmanageable levels
Also it´s easy to imagine vendors having something that Europe would buy, that still under current circumstances would not offer anything to Europe let alone helping the EU out in any way shape or form. Think India and China, the world´s factory countries in many ways. And of course Russia will naturally – and probably very effectively — hinder any European effort or solution to replace Russian exports.
At any rate, the above would be operationally un-manageable as no plant can run if receiving supplies on a variable basis with feeds of non-uniform qualities. The EU today has highly sensitive plants finely tuned and used to Russian high quality oil during decades. So no plant runs without continuous, foreseeably constant feed of the right quality product in large enough quantities which most probably will grow in time as demand increases.
One single ‘bad fuel’ refinery batch would produce never ending down/time impact, damages, repairs, claims, potential accidents with possible injuries, non-compliance and altered delivery schedules, liabilities everywhere. It has happened before and certainly could happen even in the Baltic ports as has been the case already with terrible impact
So, the following is all needed ASAP
- Overall agreement on European energy sourcing philosophy (years)
- Role of nuclear energy & LPG / LNG & renewables (years)
- European Green Plan implementation status and goals (open, probably never)
- Oil & gas & coal substitutes and suppliers approval to replace Russian imports (years)
- Schedule, plans, consultant vetting + industry input & feedback for new feeds (years)
- Site selection candidates for each country with adequate location for new plants (many months)
- Pre-feasibility studies + regulator´s Report approval (more years)
- Feasibility studies + regulator´s approval and involvement (yet more years)
- Detailed engineering + plans + specs + drawings, etc.etc ( several years )
- Contractor bidding process re civil works, electromechanical contracts, etc. etc. etc. (years)
- Bid evaluation process, bid homologation and Contractor selection (months)
- Final design, construction, manufacturing of parts, shipping and installation (years)
- Trials, testing, commissioning, optimization, permitting (many months)
- New oil & gas feed contractor pre-selection (many months)
- Contractor bidding process etc. etc. etc. (many months)
- Bid evaluation process, bid homologation and Contractor selection (months)
- Trials and Testing (many months)
The time periods estimates required mostly do not overlap, they are sequential.
Politicians do not comprehend the language of engineering.
Ursula von der Leyen better know what she is doing.
This article has explained how Russia today supplies Europe with exclusive Urals grades of constant homogenous physical & chemical characterization that would be impossible to get from third parties fast enough and cheap enough in continuous enormously large quantities from different reservoirs wherever. So it´s a very delicate and tight matching already achieved between Schwedt and the Russian Urals blend, that most probably cannot be substituted anytime.
One possible way out of this messy mess is to rewind back to Feb. 1 , 2022 and keep buying Russian oil & gas directly from Russia while immediately commissioning Nord Stream 2.
P.S.: The Vilches “Bad Ideas vs. Power Theorem” states: “The intensity of bad ideas is inversely proportional to the distance that separates them from political power”. So ideas coming from the very center of political power have a zero in the denominator´s formula and thus are infinitely bad as per basic math anything divided by zero is infinite.