The fuel market in the Western Balkans ran into another one in a string of obstacles – there is no timeline for the repair of the damaged JANAF pipeline, the only source of oil for the sole refinery in Serbia and the region. The facility’s operator, NIS, is under sanctions imposed by the United States because of its Russian ownership. The Serbian company has been working under a temporary operating license by the administration of President Donald Trump, pending a proposed takeover by Hungarian rival MOL Group. The deadline expires on December 11.
When companies and countries involved in a crisis fail to provide updates and schedules through their public channels, speculation thrives. The oil derivatives market in the Western Balkans, and beyond, is on edge after an outage at the Croatian state-owned Jadranski naftovod (JANAF) pipeline disabled the flow to the NIS refinery in Pančevo, in neighboring Serbia.
The supply artery was ruptured on November 6 during construction works on its revitalization. In its latest update, three days ago, JANAF said it must drain the pipe before starting repairs at the site, which is in Croatia.
In the meantime, reports emerged that NIS was preparing to halt the operations of its refinery in Pančevo, the only such facility in the entire Western Balkans. JANAF is its only source of oil.
On November 13, the outgoing Government of Serbia approved the company’s request for an emergency injection from oil stocks, deciding to release up to 66,000 tons. There were no statements from the Ministry of Mining and Energy.
JANAF is also supply lifeline for Hungary, Slovakia
The JANAF system is equipped to carry as much as 24 million tons per year. It can be pushed to a maximum of 34 million tons without physical expansion.
JANAF has a central role in supplying both MOL and NIS as Russia is under sanctions
Notably, Hungary and Slovakia depend on the same pipeline, under the so-called Adria branch, as an alternative to the Russian Druzhba. There are disputes over the delivery capacity and prices.
JANAF transports oil from the terminal at the island of Krk in Croatia. One of the most pressing issues is that the company’s three-year contract with NIS expires at the end of this year.
Serbia scrambling to keep Pančevo refinery running as US sanctions deadline looms
The refinery in Pančevo is reportedly almost halving its production to delay what would potentially be another expensive shutdown. But there was no official announcement.
NIS is under US sanctions because it is majority-owned by Russia’s state-owned Gazprom. The Serbian company has been working under a temporary operating license by the administration of President Donald Trump, pending a proposed takeover by Hungarian rival MOL Group.
Serbian state reserves could keep the facility online for several more weeks. The deadline for the acquisition deal expires on December 11.
