TAL approves pipeline upgrade to help Czechs ditch Russian crude

PRAGUE (Reuters) – Owners of the Transalpine Pipeline (TAL) shipping crude from the Mediterranean to central Europe approved a plan on Wednesday to upgrade the link, which is key for the Czech Republic to wean itself off Russian oil, the Czech Finance Ministry said.

The Czechs, who need about 7-8 million tonnes of oil annually, take Russian oil through the Druzhba pipeline as well as other blends through TAL, which leads from Italy to Germany and hooks up to the IKL pipeline from Germany to the Czech Republic.

But limited TAL capacity means that the country cannot replace Druzhba supplies completely for the time being. The Czech Republic is one of three countries that negotiated an exception from the looming EU embargo on Russian crude.

“The TAL+ modification of the pipeline will be completed in 2025 and the Czech Republic will thus be fully prepared for the possibility of a complete halt of Russian oil supplies,” the Czech Finance Ministry, which holds a 5% stake in TAL, said in a statement.

TAL shareholders, led by Austria’s OMV with a 32% stake and also including several oil majors, approved the TAL+ project which will increase the speed of the oil flow in the pipeline, allowing the Czech capacity allocation to increase by 4 million tonnes per year, the ministry said.

The project will cost 1.2-1.6 billion crowns ($50.8 million-67.7 million) and last about 25 months, it said.

($1 = 23.6250 Czech crowns)

(Reporting by Jan Lopatka; Editing by Kirsten Donovan)