26/05/18
Q&A: Liwathon could handle Kazakh supply for Europe
London, 18 May (Argus) — After Moscow suspended the delivery of Kazakh crude to
PCK's 204,000 b/d Schwedt refinery in eastern Germany through the northern leg
of the Druzhba pipeline in April, Estonia's Liwathon sees an opportunity to
offer an alternative route. Its chief executive Merika Nimmo spoke to Argus, and
editied highlights follow. As Kazakh crude supplies to Schwedt come under
pressure, how is Liwathon positioning itself to offer alternative supply
solutions to Europe? Our Muuga Harbour terminal in Estonia combines deep-water
access, significant storage, and integrated sea, rail and road connectivity,
offering Kazakhstan a genuine multimodal gateway to European markets. Cargoes
can arrive by rail directly into the terminal, by vessel at the port for
storage, blending and onward distribution across Europe. For PCK Schwedt
specifically, our infrastructure can support alternative delivery and storage
solutions into the European market, giving refiners and the Kazakh side
meaningful optionality where pipeline routes are under strain. The recent
suspension of Kazakh crude transit to Germany via Druzhba illustrates the
vulnerability of single-corridor reliance. Estonia offers a credible contingency
route, capable of being activated when established channels face technical,
operational or geopolitical disruption. For traders, the commercial logic is
reinforced by blending and optimisation capability at the terminal, which
improves trade economics and supports consolidation of smaller producer volumes
seeking European market access. How willing are European buyers to lift this
Kazakh product flow from Liwathon storage? European buyers continue to
prioritise supply security, route diversification and logistical flexibility,
and are increasingly evaluating infrastructure that can deliver reliably through
periods of disruption. Independent terminals with strong maritime access,
storage flexibility and efficient customs handling are attracting growing
attention. Commercial viability of Kazakh flows via the Baltic naturally depends
on freight, insurance and product specifications, but improves materially where
storage is used for blending and optimisation rather than pure transit. On that
basis, there is clear interest from market participants in maintaining access to
alternative import corridors and well-positioned European storage capacity. The
interruption to Kazakh crude flows to Germany is, apparently, only temporary.
Moscow says the reason for the interruption is a technical fault. How is
Liwathon positioning itself long-term should Kazakh crude flows resume? Our
strategy isn't built around any single disruption. The broader trend is
diversification — and recent events only reinforce how quickly established
corridors can be affected. Liwathon's role is to remain a flexible, independent
logistics hub capable of handling crude, refined products and petrochemicals
across multiple flows. The strategic case for independent storage and multimodal
infrastructure holds whether current interruptions prove temporary or not.
Liwathon has been trying to establish a foothold in the German refining space.
How is the share acquisition in Schwedt refinery progressing? Liwathon's focus
is terminal infrastructure, storage, blending and logistics. We do not comment
on external investment discussions or third-party refinery transactions. Where
does Liwathon see other opportunities to break into the European refining
industry? Liwathon Group has consistently viewed energy security as critical to
Europe's long-term resilience. We will continue to assess opportunities across
the European infrastructure sector, refineries included, as and when they arise.
Where an asset aligns with our strategy and complements the existing portfolio,
we will look at it on its merits. H ow else does Liwathon see the health of its
storage business? Are there any plans to expand capacity through acquisitions or
construction projects? When Liwathon entered the infrastructure market, the
decision was clear: own best-in-class assets in each region we operate. That
discipline is what keeps us competitive over the long term, and recent years
have reinforced the strategic value of independent storage and multimodal
logistics to the European energy market, particularly during periods of
disruption, volatility and shifting trade flows. That conviction has translated
into substantial investment. In the Bahamas, we have committed significant
capital to bring our terminal back into operation. In Estonia, we have continued
to invest in our Muuga infrastructure to expand local commercial activity and
strengthen the asset's competitive position. We remain open to acquisitions and
further investment in our existing portfolio where the commercial logic is
sound. The priority remains on strengthening the utilisation, flexibility and
competitiveness of our existing infrastructure while maintaining a disciplined
and commercially sustainable approach to future growth. By George Maher-Bonnett
and Natalie Müller Send comments and request more information at
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