Raw awakening: German city on the front line of Russian sanctions

Ursula Patz opposes Russia’s war on Ukraine. But she is also strongly opposed to anti-Moscow sanctions which she says will put her city at risk.

“Penalties that end up hurting you more don’t make sense,” the 76-year-old said. An oil embargo “won’t hurt Russia — they’ll just sell the oil to someone else.”

Patz worked for 16 years at an oil refinery in the northeastern German town of Schwedt that risks becoming collateral damage in Europe’s campaign for punitive measures against Russia.

At issue is the EU’s import ban on Russian oil, which aims to deprive President Vladimir Putin of revenue to fund his war in Ukraine. The measure, which comes into force on January 1, has broad support in Germany but has cast doubt on the future of the Schwedt refinery.

“People here feel like a sacrificed pawn in a game,” said Jens Koeppen, a Christian Democrat MP who represents the city.

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

The PCK refinery in Schwedt, which employs around 1,200 people

The PCK refinery in Schwedt, which employs around 1,200 people © Hannes Jung/FT

The problem is the refinery’s dependence on Russian oil. It sits atop the “Druzhba” pipeline, which carries crude some 4,000 km from Almetyevsk in central Russia directly to Schwedt. And the plant is configured to operate with Russia’s leading grade of high-sulphur “Ural” crude.

What complicates matters most, however, is that it is owned by Russia: the Kremlin-controlled oil company Rosneft controls 54% of its shares and has little interest in dealing in crude from other sources.

Many in Schwedt fear the refinery, known as PCK, could be forced to close if it loses access to Russian oil. “It would be a nightmare scenario,” said city mayor Annekathrin Hoppe. “People here fear for their existence.”

Schwedt’s largest employer, PCK employs 1,200 people. Hundreds more work in auxiliary services, making pipelines, heat exchangers, pumps and cooling units for the plant, Hoppe said.

Mayor of Schwedt, Annekathrin Hoppe:
Annekathrin Hoppe, mayor of Schwedt: “People here fear for their existence” © Hannes Jung/FT

“All of those jobs would be affected, and all of those people have families,” she said. In addition, “about 80% of the city is supplied with district heating by the PCK power plant”. It’s still unclear, she said, how homes would be heated if she went bankrupt.

Residents of Schwedt fear a repeat of economic dislocation in the region after German reunification in 1990. “They are facing a second deindustrialization of East Germany,” Koeppen said. “And they won’t take it lying down.”

Schwedt reflects the ups and downs of the region. The city was almost completely destroyed during the Soviet advance in World War II. Then, in the 1950s, young people from all over East Germany converged on Schwedt to rebuild the city and erect the PCK, short for “petrochemical kombinat” or combine.

Schwedt came to embody the close ties between Russia and the GDR. Local newspapers in the 1960s reported the excitement when PCK was connected to the newly constructed Druzhba pipeline in 1963.

PCK company publication celebrates the first Russian oil deliveries through the Druzhba (Friendship) pipeline in 1963

PCK company publication celebrates the first Russian oil deliveries via the Druzhba (Friendship) pipeline in 1963 © Schwedt City Archive

“The oil has arrived! said a front-page headline in the PCK post “Young Builder.” “Glory and honor to the builders of the longest pipeline in the world!”

Druzhba, which continues to supply a quarter of Germany’s crude oil, has always had positive connotations for Patz. “It means friendship in Russian – such a lovely word,” she said. “It means something good.”

Shortly after its commissioning in 1964, PCK established itself as the region’s main supplier of gasoline, diesel, kerosene and fuel oil. Large consumers, such as Berlin International Airport, still depend on its products.

So there was widespread anger in Schwedt when Germany signed the embargo. Some have questioned why it did not follow the examples of Hungary, the Czech Republic and Slovakia, which are also linked to Druzhba but have negotiated temporary waivers to the import ban, citing their lack of knowledge. alternatives to Russian oil.

“People just can’t understand why Germany voluntarily decided on this embargo,” Hoppe said. “Everyone condemns this war, but people are also fighting for their jobs.”

The discontent was seized upon by populists on the right and left. The far-right Alternative for Germany put up posters in the city with the slogan: “If the CPK dies, so does Schwedt”.

Chancellor Olaf Scholz insists that the government is working to preserve the future of the CPK. Officials promised it would continue to process oil into next year and into 2024 and that jobs would be protected.

“Tabakbrunnen” at Vierradener Platz, Schwedt.

Schwedt in the state of Brandenburg epitomized the close ties between Moscow and the GDR © Hannes Jung/FT

Schwedt, Brandenburg, Germany

Citizens from all over the GDR helped rebuild the city after World War II © Hannes Jung/FT

For this, they are studying other ways to supply the refinery, mainly via a pipeline from the northeast port of Rostock.

But Koeppen, the MP, said that would not solve the problem. The pipeline can only transport 19,000 of the 32,000 tonnes of oil per day that PCK needs, he said.

“The port of Rostock is also not deep enough to accept tankers,” he said. Oil would have to be imported to Wilhelmshaven on the North Sea and transferred to smaller vessels, he added. “And we don’t have the ships.”

PCK also hopes to receive oil from Kazakhstan and is studying a supply via the Polish port of Gdansk. “But the Poles say they don’t want to supply us as long as the factory is still owned by Rosneft,” said a PCK worker, who requested anonymity. “And we can’t just dismiss that.”

In the longer term, Berlin wants to secure PCK’s future by transforming it into a “green refinery”. Two companies – Enertrag, a wind energy company, and Verbio, a biofuel producer already present in Schwedt – have expressed interest in taking stakes in PCK.

Hoppe said that with their involvement, the refinery could produce “green hydrogen” which could be combined with CO₂ captured from the atmosphere to make sustainable synthetic fuels, including “e-kerosene” for airplanes. .

But it will take years for PCK to make the transition. Meanwhile, an oil embargo is looming which could have fatal short-term consequences for the refinery.

“Three months have passed [since the embargo was agreed] and we still hear the same promises,” Hoppe said. “Hurry up.”

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