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Poland's PKN Orlen applied for 3 MMt of Russian oil via Druzhba for 2023

(Reuters) - Polish oil refiner PKN Orlen has submitted an application to the Russian oil pipeline monopoly Transneft for the supply of 3 MMt of oil to Poland through the Druzhba pipeline system in 2023 under continuing long-term contracts, the Kommersant newspaper wrote on Wednesday, citing sources.

Transneft confirmed to Kommersant that it had received requests from consumers in Poland for the next year, but did not specify who submitted the application or the volume.

The European Union will impose an embargo on the import of Russian oil from Dec. 5, but the ban formally applies only to supplies by sea and deliveries through Druzhba are not subject to it. However, Poland and Germany, both receiving oil via the northern branch of the Druzhba pipeline, have previously stated that they will stop oil imports from Russia by the end of 2022.

"PKN Orlen has consistently diversified its oil supplies. Currently 70% of oil to all the company's refineries in Poland, the Czech Republic and Lithuania comes from alternative directions to Russian (sic) ... The company is currently continuing only the long-term contracts for deliveries to Poland from this direction (Russia)," PKN Orlen's press office told Reuters in response to a request for comment. It added that it had stopped all Russian oil imports via sea.

PKN Orlen has oil supply contracts with Rosneft and Tatneft . The contract with Rosneft is expected to expire by year's end, while the agreement with Tatneft is valid until December 2023, according to traders. Tatneft supplies about 200,000 tonnes of crude oil per month to Poland under the agreement. Both contracts were signed prior to February 2022.

"In the absence of direct restrictions, the purchase of Urals under old contract terms is very beneficial for PKN Orlen next year: prices are based on the cost of seaborne Urals, which remains at historical lows," a trader in the Russian oil market said.

(Reporting by Reuters reporters Additional reporting by Anna Koper in Warsaw Editing by Matthew Lewis)

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