Energy 20 September, 2021 12:00 pm   
COMMENTS: Igor Wasilewski

Wasilewski: PERN will have its hands full, even during the EU energy transition (INTERVIEW)

Even during the energy transition, oil will not disappear completely. Refineries, especially the petrochemical sector, will continue to need it. PERN is preparing a strategy and a path of action for this time – says PERN President Igor Wasilewski in an interview with What is the importance of the expansion of the oil terminal in Gdańsk in the context of Poland’s security?

Igor Wasilewski: If we are talking about Poland’s energy security, we need to start with the fact that our customers buy oil from different countries. This oil comes in different kinds, with different properties. When tankers arrive in Poland, they must be unloaded and the oil transported to – and stored in appropriate tanks. This raw material is delivered to the refinery in due time, and in line with the demands of our customers.

Why is this investment so crucial? Until 2016 we only had a resource base located near the Naftoport in Górki Zachodnie. Its storage capacity was about 900 thousand cubic meters (tcm). In April 2016 we finished the first stage of the construction of the oil terminal in Gdańsk, bulding six tanks of 62.5 tcm capacity, which is a total of 375 tcm.

However, for a few years now refineries have been increasing their oil consumption, which is a direct result of the fuel package introduced in 2016, which upped the demand for fuels from legal sources. The growing demand for fuel from Polish refineries increases the demand for storage capacity. That is why we decided to expand the terminal by adding three tanks capable of holding 100 tcm of oil, and two with a capacity of 45 tcm each. That gives an additional capacity of 390 tcm.

To date, the most frequently arriving tankers had to be unloaded into three storage tanks. It was often the case that one tank was not completely filled. Currently, the cargo can be stored in two tanks – a bigger and a smaller one. A wider range of tank sizes with different capacities guarantees better use of the storage capacity. The newly built tanks also have a better diameter to height ratio (they are taller and “slimmer”). The aim was to make the best possible use of the port area on which the oil terminal is located, and which has limited development possibilities.

In addition to these tanks, we’ve built two 100 tcm tanks at the base in Górki Zachodnie. So in total, after the first and second expansion projects of the oil terminal in Gdańsk, we have 765 tcm of available capacity, plus 200 tcm at the base in Górki Zachodnie, which together yields almost 900 tcm in new storage capacity within five years. The increased storage capacity allows Poland’s refining companies to pursue a purchasing policy that is more flexible. They can buy oil when it is profitable for them and store it in these tanks. The second important element that stood the test in 2019 is the sole ability to store oil in case of emergencies. In 2019, we had the chloride crisis. For 46 days, oil did not flow to Poland by pipeline, so we could only rely on deliveries by sea and our own supplies. Despite that, our customers and gas station clients did not experience any fuel shortages. We are prepared for various options, and even the lack of oil supplies from the east did not disrupt the functioning of the state.

What is the current ratio between the oil imported from Russia and from other sources?

The share of Russian oil in the mix of raw materials imported to Poland has been decreasing for several years. Today we import by sea more kinds of oil that are other than REBCO (Urals oil – ed.). The vast majority of those are light oils. The share of REBCO delivered by sea is 30 percent of all cargoes.

The growing share of oil imported by tankers contributed to the decision to build the storage tanks on the coast. It is not only about prices, but also quality. For instance, the sulfation of Russian oil is going up, but across the world there are many oil kinds that have very low levels of sulfur. Our clients determine what kind of oil is delivered to the port in Gdańsk. Our job is to be prepared to admit every kind of oil. Customers choose the oil that will fit their needs, and we provide storage services.

How many different types of oil can be stored, for example, here at the PERN base in the Naftoport?

It depends on the customer demand. I don’t want to go into too much detail, because it’s a trade secret of our customers, but each tank can be used for different types of oil. The customer, their preferences, will determine what oil will be stored. I can say that at the moment at the oil terminal in Gdańsk all the oil tanks are full, including those that have been opened only recently. This also shows that the decision to increase storage capacity was very sensible.

How does PERN view the EU plans on limiting the supply of fuel-powered cars? Over the next few years, the market for vehicles powered by conventional fuels will shrink, which will also affect your role as a fuel and crude oil storage company. What’s your approach to this challenge?

EU regulations will indeed have an impact on reducing fuel consumption, whether in the road, air or sea transport sectors. The Fit for 55 project provides for a ban on registering new cars with an internal combustion engine as of 2035. Our job is to ensure the supply of oil and fuel to our customers. At the same time, Orlen and Lotos are investing heavily in the development of their petrochemical plants to produce petrochemicals. They also need oil input for their production process, which means that these tanks will fulfill their role in one way or another. PERN sees the market is changing, we see that the climate policy will force some changes, but it will not happen overnight, and on the other hand, we see an opportunity in the development of the petrochemical industry.

Interview by Mariusz Marszałkowski