Exam passed with an A

2019 presented the fuel industry with a number of challenges, which Grupa LOTOS tackled successfully. First of all, it managed to efficiently overcome the chlorine crisis, involving contaminated crude oil supplies from Russia over the Druzhba pipeline. The Company stopped receiving and processing the contaminated feedstock, secured alternative supply sources, and thus was able to sustain safe, effective and continuous operation of the refinery.

Following the contamination of Russian oil with chlorines, PERN, the state-owned operator of transmission and storage infrastructure, had to completely discontinue the transmission of crude oil from the eastern direction between April 24th and June 9th 2019. Grupa LOTOS promptly implemented all procedures it had in place for such a contingency. Appropriate steps were taken immediately after the first information on the problem was received. The key issue was to properly schedule crude oil supplies by sea, which ensured the availability of sufficient crude volumes to maintain the processing and fuel production at maximum levels.

The task was made easier by the Company’s location. With the Naftoport terminal in close proximity, Grupa LOTOS has always had flexibility and the ability to source a wide range of crudes from many directions across the world. Another noteworthy fact was the good communication with the Ministry of Energy, PERN and the other refineries. As a result, the situation did not adversely affect LOTOS’ customers, who were at all times supplied with high quality products.

The Company also analysed the available technical solutions that could be applied in the future to mitigate adverse effects of crude oil supplies which do not meet Grupa LOTOS’ quality requirements (including, but not limited to, increased organic chloride content). As a result, recommendations were prepared for investment projects to be implemented in the long term. Further analyses will be made to decide which of them will be carried out. Conclusions were also drawn by others (for instance, PERN started to test transmitted oil for chloride content once every three hours).

Grupa LOTOS has estimated the costs of processing crude oil contaminated with organic chloride in order to make a claim against the Russian suppliers.