Croatia's Janaf ready to supply MOL's refineries with more crude if Druzhba flows stop

By Marek Strzelecki and Krisztina Than

WARSAW/BUDAPEST (Reuters) -Croatian pipeline operator Janaf could fully cover the needs of the two refineries of Hungarian oil group MOL in Hungary and Slovakia that now mostly depend on Russian oil delivered via the Druzhba pipeline, Janaf's chief told Reuters.  

MOL warned last month of potential fuel shortages in Central Europe following Ukrainian attacks on Druzhba that caused a temporary suspension of shipments there.

MOL, which signed a contract with Janaf in February for delivery of 2.1 million tons of oil by the end of 2025, has expressed doubts whether the Adriatic pipeline could supply enough oil if shipments on Druzhba stopped entirely. The total capacity of MOL's two main refineries is 14.2 million tonnes and most of their crude supplies come via Druzhba.

"Janaf can fully meet the annual crude oil needs of MOL Group refineries (...)," Stjepan Adanic, chairman of the management board at Janaf said in an emailed reply to Reuters questions. 

"The pipeline is in good technical condition and fully capable of ensuring stable supply, including the possible increase in quantity, should delivery via the Druzhba pipeline cease," he said.

Adanic said Janaf's pipeline system capacities have been repeatedly tested, most recently last June in collaboration with MOL.

The test established the pipeline had annual capacity of 11.8 million tons of crude, which could be increased to 14 million with an addition of polymers, which reduce friction, he said.

Adanic also said Janaf could immediately increase the volume of transport for MOL if necessary.

MOL faces growing European Union pressure to diversify supplies, but the group has said both Druzhba and the Adriatic pipelines were essential for its refineries' operations, while Janaf's transit fees made the Adriatic route too expensive.

In response, Adanic said Janaf’s pricing includes shipping, unloading, transshipment, and technological storage and handling at terminals — services that other competitors do not offer.

"The oil transport business does not have benchmark prices, nor are there two comparable pipelines in the world," he said. 

(Reporting by Marek Strzelecki and Krisztina ThanEditing by Tomasz Janowski)