Since the beginning of Russia's full-scale military invasion of Ukraine, the friendly Poland has become a major transiter of all goods for Ukraine. The developed propane-butane market allowed the country to become the largest supplier of LPG to Ukraine during the crisis period. The LPG imports from Poland increased to 291 thousand tons in 2022, against 37 thousand tons of situational supplies in 2021, in Daily fuels&LPG report says.
In the spring of 2022, importers quickly got into contact with their Polish colleagues and jointly saturated the market with the relevant gas volumes. It is logical the Ukrainian importers would demand that the suppliers should not deal with Russian gas in any case. However, the issue of “purity” of the LPG supplied to the belligerent country started getting vague. The thesis "No dollar for the occupier" gradually faded away in the dark schemes aimed at mixing and re-legalizing the Russian LPG. In turn, the price dumping of the Russian propane-butane non-sanctioned in the EU has become an aspect of competitive market existence for most Ukrainian importers. ”Having a $200/t difference in the input price, you either buy or you don't work,” traders say.
NaftoRynok have analyzed several different sources of fuel movement statistics in Ukraine, Poland, Russia and Belarus, which made it possible to draw a conclusion about the future use, despite the war, or even the increasing consumption of Russian gas in Ukraine in certain periods.
The first fact, namely delivery of Kazakh gas through Poland, shows the volumes of deliveries did not match, which probably indicates document swizzling.
Interestingly that despite the total amount of railway deliveries of LPG from Kazakhstan to Poland in 2022, 86 thousand tons, the Ukrainian importers registered 119 thousand tons of LPG as gas of Kazakh origin when crossing the border (this is 40% of deliveries from Poland, including road imports). At the same time, at least 31,000 tons out of 86,000 tons of railway deliveries to Poland were contracted from Kazakh traders by Ukrainian companies, and were redirected for transshipment to Ukraine.
According to traders, European legislation allows you to “turn one apple into two ones”. If a propane-butane mix is “fifty and 1%” gas from the United States, this gas can be considered to be of US origin, or a mix that is produced at a terminal in the EU. As a result of 2022, LPG supplies from Poland can be theoretically divided into the single direct contracts for Kazakh and European resources, Russian gas mixes, or frankly suspicious contracts at prices slightly higher than the cheap Russian gas.
The impossibility of avoiding entrance of Russian propane-butane is evidenced by the growth of railway deliveries from Russia to Poland - which is the second and important fact.
So, in 2022, railway deliveries of LPG from Russia to Poland increased by more than 20% and exceeded 1.2 million tons (together with deliveries from Kazakhstan, 1.31 million tons arrived by rail from the Russian Federation). SIBUR works are the biggest supplier of gas from Russia - 473,000 tons, of which 200,000 tons went to the gas hub - the Belarusian-Polish Brest – Małaczewicze railway crossing. A group of factories whose parent company is Gazprom is the second one in terms of volumes - up to 160,000 tons. The lion's share of Gazprom's gas crossed the border through the Belarusian-Polish Brest - Kuznica crossing - 104,000 tons. The third step is shared by Lukoil - 107 thousand tons, and a private oil company from Siberia called "Irkutsk NK" - up to 106 thousand tons.
The third fact suggests that the border gas hubs in eastern and northern Poland (the border to Belarus and the Kaliningrad region of the Russian Federation), where the terminals that historically transport Russian LPG are located, are the largest points of gas shipment to Ukraine. The deliveries from Poland to Ukraine by road and rail were almost 50/50 in 2022.
As to railway supplies, northern Glob-Terminal Sp. z o.o. in the city of Branevo is the largest shipper of gas to Ukraine – over 53,000 tons of LPG, almost all of which later transited through Slovakia to the Zakarpattia region. The terminal is located in the region bordering to the Kaliningrad region of Russia, which probably forms the supply basket. According to Polish carriers, it is known that the Mamono-Branevo Glob-Terminal Sp. crossing received at least 104 thousand tons of Russian gas as import and transit in 2022. Another part of the volumes from the Russian Federation was addressed for transshipment from the Belarusian-Polish border. The TEZET terminal in Brzezno is the second shipper in terms of volume (30.5 thousand tons), which is close to the Ukrainian-Polish border at the Yagodin-Dorogusk crossing. Up to 85% of these deliveries are a confirmed transshipment of Kazakh LPG contracted by Ukrainian companies directly with producers and traders from Kazakhstan. The third shipper in terms of volume - 19.8 thousand tons - is Polski Gaz S.A., a storage operator in the city of Sosnowiec in southern Poland. Gas flows here from all possible sources of supply to Poland. However, over 60% of the resource received by the gas pumping station in 2022 by domestic rail transportation came from Russian LPG transshipment hubs.
In terms of truck deliveries, the key source is the closest to Ukraine LPG hub in the vicinity of Małaczewicze, where the terminals of Bialchem Group, Gaspol, AmeriGas, Transgaz, "ALEKSANDRA", GAZOL, are located. According to NaftoRynok, it accounts for 38% of truck LPG deliveries from Poland to Ukraine in 2022. At the same time, Małaczewicze is the largest source of Russian gas coming to Poland - 390,000 tons, and that of Kazakh gas - up to 63,000 tons.
At the same time, BARTER SA is the largest shipper of truck consignments to Ukraine - 41.5 thousand tons. At least 29 thousand tons of them were purchased by Ukrainian companies for pickup from the BARTER SA terminal in Sokulka. The terminal is located 17 km away from the third largest source of the Russian gas supplies (306,000 tons) - the Bruzgi (Belarus) - Kuznica (Poland) railway crossing. It should be noted that 25.8 thousand tons out of 29 thousand tons of LPG sold under the Sokulka FCA terms were registered as gas of Kazakh origin when crossing the Ukrainian border. At the same time, no resource was supplied to Poland from Kazakhstan through Bruzgi - Kuznica. In addition, the company shipped gas from other bases. For example, from Małaczewicze, where it received 10.8 thousand tons of LPG produced by subsidiaries of Gazprom, Tatneft, Omsk Kauchuk, etc during March-December 2022.
Pakar (Pakar Jacek Szpakowski) is the second, but not a smaller, shipper worth paying attention to - 30.5 thousand tons of truck deliveries to Ukraine in 2022. Pakar ships the resource from many bases in Poland. However, at least 15,000 tons were shipped based on FCA terms from its own terminal in Białystok, which also has a short distance to the flow of Russian gas through Bruzgi – Kuznica, namely only 60 km.
Interestingly, all the previously mentioned companies are only the party that would ship the gas. It can be both directly an owner of the terminal that shipped the gas, and a third party that has an agreement for storage, transshipment, or mixing thereof at the terminal. While, according to NaftoRynok, Barter is the seller of the majority of the resource shipped by it (83%), the Swiss resident EVICOR AG turned out to be the real counterparty seller of 19.7 thousand tons out of the 30.5 thousand tons of gas shipped through Pakar. According to the importers, the Ukrainian companies of the well-known Coral Energy trader offer gas on behalf of the EVICOR AG trader, without any certificates of origin. Price is one of the red banners for the EVICOR AG resource. As a rule, it is at the lower level of import supplies to the country and is generally economically impossible in the case of supplies from Polish seaports or supplies of the resource from refineries of EU countries.
Citizens of Ukraine currently also work in other European trading and logistics companies. For example, in Intertransgas, the company offers gas from the northwestern bases of Poland, the largest recipients of gas from the terrorist country.
Barter SA and Evicor AG are the leaders in 2022 both among the shippers and the actual sellers of gas from Poland to Ukrainian importers. Only two companies partially approached their level among the truck lot sellers. These two include the international trader, and in particular, one of the largest suppliers of Kazakh gas in Poland, Vitol (through the VENOR Polska resident) - 15.5 thousand tons, and the Małaczewicze Bialchem Chem terminal operator - 17 thousand tons.
The largest traders and LPG selling chains are the Ukrainian recipients of gas from Poland, including from the main Russian gas transshipment points. The importers interviewed by NaftoRynok claim that they hold the certificates for gas produced in the EU. Thus, the directions of liquefied gas supplies to Ukraine from Lithuania, Latvia (see the Daily fuels&LPG issue dated 02.03.2023) and Poland remain the most likely flows of propane-butane produced by the terrorist country to the country that suffers and repays terrorism.
As of April 18, 2023, the Cabinet of Ministers of Ukraine, the Verkhovna Rada, and the NSDC did not adopt any document that would prohibit supplying Russian and Belarusian oil products to Ukraine. 80% of fuel importers use such a ban absence. The first meeting of traders and the Ministry of Energy of Ukraine on limiting the supply of oil products from the Russian Federation took place on January 20, 2023.