Posted By Global Banking and Finance Review
Posted on January 14, 2025
NELAHOZEVES, Czech Republic (Reuters) - Upgrades to boost the capacity for oil deliveries to the Czech Republic via the TAL pipeline are complete, ending the country's need to import Russian crude, Prime Minister Petr Fiala said on Tuesday.
The Czech Republic has worked to wean itself off Russian oil and gas since Russia's invasion of Ukraine in 2022.
Already the country had no direct contracts with Russian gas suppliers. Now the TAL pipeline has the capacity to meet all of its oil demand, it need no longer rely on the Druzhba pipeline from the east, which previously delivered half of its supplies.
"This is a crucial moment for the Czech Republic because Russia can no longer blackmail us with (energy supplies)," Fiala said.
The upgrades to the Trans Alpine (TAL) pipeline, running from Italy to Germany before feeding into a connector, double the capacity available for the Czech Republic to 8 million metric tons a year, enough for its annual needs.
Testing and certification must be completed, but Fiala said the country could already rely on TAL should there be any disruption of Russian flows through the Druzhba pipeline that has supplied the Czech Republic for six decades.
State pipeline company MERO has said it expects to start increasing oil shipments in the second quarter.
The Czech Republic started diversifying supplies in 1995 by building the IKL pipeline connecting to TAL in southern Germany. But one of the two Czech refineries, both owned by Poland's Orlen, continued to process Russian oil.
Finance Minister Zbynek Stanjura said Orlen's Czech unit Unipetrol had indicated zero oil purchases from Russia in the second half of the year.
Unipetrol said in a separate statement it would shift to new crude blends once the TAL upgrades had been tested and were fully operational, which is expected by the end of the first half.
The Czech Republic's dependence on Russian fuel meant it was exempt from European Union sanctions on Russian pipeline oil.
Even after a full switch from Russian supplies, MERO operations director Zdenek Dundr told Reuters in November that the Druzhba pipeline would remain as a back-up.
(This story has been refiled to add a dropped letter in the headline)
(Reporting by David W Cerny and Jan Lopatka; writing by Jason Hovet; editing by Barbara Lewis)
