Crude awakening: the German city on the frontline of Russian sanctions

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Ursula Patz opposes Russia’s warfare on Ukraine. However she can also be firmly towards anti-Moscow sanctions that she says will imperil her city.

“Sanctions that find yourself hurting you extra make no sense,” the 76-year-old mentioned. An oil embargo “received’t hurt Russia — they’ll simply promote the oil to another person”.

Patz labored for 16 years at an oil refinery within the north-east German city of Schwedt that dangers changing into collateral harm in Europe’s marketing campaign of punitive measures towards Russia.

At difficulty is the EU’s ban on imports of Russian oil, which is designed to deprive President Vladimir Putin of revenues to fund his war in Ukraine. The measure, which comes into power on January 1, has broad assist in Germany however has thrown the way forward for Schwedt’s refinery into doubt.

“Individuals right here really feel they’re a pawn that’s being sacrificed in some recreation,” mentioned Jens Koeppen, a Christian Democrat MP who represents the city.

Former refinery worker Ursula Patz says the sanctions ‘won’t harm Russia’
Former refinery employee Ursula Patz says the sanctions ‘received’t hurt Russia’ © Hannes Jung/FT

Schwedt’s PCK refinery, which employs about 1,200 people
Schwedt’s PCK refinery, which employs about 1,200 individuals © Hannes Jung/FT

At difficulty is the refinery’s reliance on Russian oil. It sits atop the “Druzhba” pipeline, which carries crude some 4,000km from Almetyevsk in central Russia on to Schwedt. And the plant is configured to work with Russia’s fundamental high-sulphur “Urals” grade of crude.

What complicates issues most, although, is that it’s Russian-owned: the Kremlin-controlled oil firm Rosneft controls 54 per cent of its shares and has little curiosity in processing crude from different sources.

Many in Schwedt concern the refinery, often called PCK, will probably be pressured to shut if it loses access to Russian oil. “That might be a nightmare situation,” mentioned the city’s mayor, Annekathrin Hoppe. “Individuals right here concern for his or her existence.”

Schwedt’s greatest employer, PCK has a workforce of 1,200. Lots of extra work in ancillary companies, making pipelines, warmth exchangers, pumps and cooling models for the plant, mentioned Hoppe.

Schwedt mayor Annekathrin Hoppe: ‘People here fear for their existence’
Schwedt mayor Annekathrin Hoppe: ‘Individuals right here concern for his or her existence’ © Hannes Jung/FT

“All these jobs could be affected, and all these individuals have households,” she mentioned. Moreover, “round 80 per cent of the city is provided with district heating from PCK’s energy plant”. It’s nonetheless unclear, she mentioned, how houses could be heated if it goes out of enterprise.

The individuals of Schwedt concern a repetition of the financial dislocation within the area after German reunification in 1990. “They’re dealing with a second deindustrialisation of east Germany,” mentioned Koeppen. “And so they received’t take it mendacity down.”

Schwedt displays the area’s highs and lows. The city was nearly utterly destroyed within the Soviet advance throughout the second world warfare. Then within the Fifties younger individuals from throughout East Germany converged on Schwedt to rebuild the city and erect the PCK, quick for “petrochemical kombinat” or mix.

Schwedt got here to embody the shut ties between Russia and the GDR. Native newspapers from the Sixties conveyed the joy when PCK was linked to the newly-built Druzhba pipeline in 1963.

The PCK company publication celebrates the first deliveries of Russian oil via the Druzhba (Friendship) pipeline in 1963
The PCK firm publication celebrates the primary deliveries of Russian oil by way of the Druzhba (Friendship) pipeline in 1963 © Schwedt Metropolis Archive

“The oil has arrived!” mentioned a front-page headline within the PCK publication “Younger Builder”. “Glory and honour to the builders of the longest pipeline on this planet!”

Druzhba, which continues to supply 1 / 4 of Germany’s crude oil, at all times had constructive connotations for Patz. “It means friendship in Russian — such a beautiful phrase,” she mentioned. “It means one thing good.”

Quickly after it got here on-line in 1964, PCK established itself because the area’s fundamental provider of petrol, diesel, jet kerosene and gasoline oil. Large customers — similar to Berlin’s worldwide airport — nonetheless rely upon its merchandise.

So there was widespread anger in Schwedt when Germany signed up for the embargo. Some individuals puzzled why it had not adopted the examples of Hungary, the Czech Republic and Slovakia, that are additionally linked to Druzhba however negotiated short-term exemptions from the import ban, citing their lack of alternate options to Russian oil.

“Individuals simply can’t perceive why Germany voluntarily selected this embargo,” mentioned Hoppe. “Everybody condemns this warfare, however persons are additionally preventing for his or her jobs.”

Discontent has been seized on by populists on the suitable and left. The arduous proper Different for Germany has put up posters within the city with the slogan: “If PCK dies, so does Schwedt”.

Chancellor Olaf Scholz insists the federal government is working to safeguard PCK’s future. Officers have promised that it’s going to proceed to course of oil subsequent yr and in 2024 and that jobs will probably be protected.

“Tabakbrunnen” at the Vierradener Platz, Schwedt.
Schwedt, in Brandenburg state, embodied the shut ties between Moscow and the GDR © Hannes Jung/FT

Schwedt, Brandenburg, Germany
Residents from throughout the GDR helped to rebuild the city after the second world warfare © Hannes Jung/FT

To that finish they’re exploring alternative routes of supplying the refinery, principally by way of a pipeline from the northeastern port of Rostock.

However Koeppen, the MP, mentioned that received’t resolve the issue. The pipeline can ship solely 19,000 of the 32,000 tonnes a day of oil that PCK wants, he mentioned.

“Rostock port can also be not deep sufficient to just accept oil tankers,” he mentioned. The oil must be imported into Wilhelmshaven on the North Sea and transferred on to smaller ships, he added. “And we don’t have the ships.”

PCK additionally hopes to obtain oil from Kazakhstan, and is trying into provides by way of the Polish port of Gdansk. “However the Poles say they don’t wish to provide us whereas the plant continues to be owned by Rosneft,” mentioned a employee at PCK, who declined to be named. “And we are able to’t simply brush that apart.”

Longer-term Berlin needs to safe PCK’s future by remodeling it right into a “inexperienced refinery”. Two firms — Enertrag, a wind vitality agency, and Verbio, a biofuels producer that already has operations in Schwedt — have expressed an curiosity in taking stakes in PCK.

Hoppe mentioned with their involvement, the refinery may produce “inexperienced hydrogen” which might be mixed with CO₂ captured from the environment to make sustainable artificial fuels — together with “e-kerosene” for planes.

However it’ll take years for PCK to make the transition. In the meantime, an oil embargo looms that would have fateful short-term penalties for the refinery.

“Three months have handed [since the embargo was agreed] and we’re nonetheless listening to the identical guarantees,” mentioned Hoppe. “Time is operating out.”

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