In our conversation with Andrzej Brzózka, the CEO of Naftoport, we explore the significance of this strategic terminal for the Polish economy, and the challenges related to its security and infrastructure.

The year 2022 proved to be a challenge for Naftoport. It was a record-breaking year in terms of cargo handling and a year in which Naftoport had to assume a new role as a guarantor of crude oil supplies to Poland. How do you assess cargo handling in 2023? What is Naftoport's current impact on the Polish economy?

Over the past five to six years, except for the pandemic year, our terminal has consistently increased its cargo handling capacity. This has been controlled, stable growth. However, in 2022, due to the outbreak of war and changing geopolitical circumstances, we were forced to operate under entirely different conditions. We had to adapt to a sudden surge in demand. We prepared organizationally for this situation, but even our boldest forecasts did not anticipate such a jump.

In 2021, we reached a record level of cargo handling, totaling 18 million tons and it seemed that this level would be maintained in the following years. However, in 2022, due to the changing situation, we handled almost 25 million tons of crude oil and petroleum products. But, it does not end there. In the meantime, Europe had practically abandoned supplies of Russian resources, leading to a significant increase in demand for our services. Between February and August 2023, we recorded a 60% increase in cargo handling compared to the previous year. This means we expect to end this year with a result totaling over 36 million tons of crude oil and fuel products.

As for our role, since February - through the PERN logistics system - we have been the sole source of crude oil supplies to Poland, and also a crucial, highly versatile fuel terminal enabling supplementary deliveries of finished fuel products. Our role has become pivotal, and our ability to adapt to changing conditions has allowed us to meet current challenges. This ensures the stability of supply for the national economy and the ability to deliver finished fuel products to the global market.

Regarding the 36 million tons, it seems that this was once just a theoretical concept of the terminal's capabilities, but now it has become a reality. How do you assess the effectiveness of your system and your terminal in the face of such a massive load?

Indeed, I consider it a significant achievement for our company. I would like to mention that when I started my tenure on the board over six years ago, we defined our cargo handling capacity as a maximum of 36 million tons of crude and 4 million tons of fuel, exceeding the volumes we were handling at that time, which were around 12-14 million tons annually. At that time, it was challenging to determine how much cargo we could handle. However, based on the parameters of our equipment and installations and the long-standing experience of Naftoport's staff, we adopted these values, which, from today's perspective, have proven to be accurate, as each subsequent year of growth has confirmed. In our strategy, we even assumed the most dramatic emergency scenarios, such as the complete cessation of pipeline deliveries, which, as we now know, has become a reality.

When this happened, we were prepared. Over the years, we have implemented structural and organizational changes in our terminal, increased our human resources, and developed the necessary expertise in the oil industry and regarding maintenance issues. Our organizational and technical efforts have allowed us to smoothly and efficiently cope with the sudden increase in cargo handling. What was once difficult to imagine has become a reality, and we have maintained operational continuity in the face of a significant load. In August, for example, we had a record number of ships in the terminal - 44 vessels, along with a record cargo handling volume. Our goal now is to maintain the technical efficiency of the terminal and continue its development.

I understand that with this increase in cargo handling, you are introducing another investment - a new loading station. Could you say a few words about this?

Yes, we initiated the investment process in January this year. A few years ago, we had already prepared the concept of this station, considering potential growth in response to future demand. This means that we had a plan and technical solutions in place. In January this year, we began the concrete phase of the investment. Currently, preparations for the investment are underway, including design work and obtaining the necessary permits.

The actual construction of this new loading station has not yet begun but may start in about 2-3 years. The new station will be the sixth at our terminal, the fourth for unloading raw materials, and the second for VLCC (Very Large Crude Carriers). Its primary purpose is to increase Naftoport's future capacity to meet the growing interest of foreign customers in using our infrastructure for deliveries. Additionally, the new station will allow us more flexibility and efficiency in servicing the existing terminal infrastructure. We will have the opportunity for rotation and the availability of stations for work, which will enable us to maintain the infrastructure through repairs and upgrades. This means that the terminal will be adapted to the foreseeable needs of the oil industry in the longer term.

What types of vessels will this new loading station be able to handle, and will it increase Naftoport's handling capacity?

The new loading station will be able to handle the largest vessels that enter the Baltic Sea. These are vessels with lengths of up to 340 meters, though they must have a draft of no more than 15 meters due to the limitations at the entrance to the Baltic Sea. In typical operational conditions, once this station is completed, the terminal's capacity will increase by approximately 9 million tons of crude oil per year.

So this will be an additional 9 million tons. Is Naftoport's current infrastructure theoretically capable of handling 40 million tons?

Yes, our theoretical capabilities are 36 million tons of crude oil and 4 million tons of fuel, as assessed many years ago. Now, after years of operation and investments, we see that we are able to handle these quantities smoothly. When this year draws to a close, it will allow us to further verify our capabilities. The renovation and modernization work we have undertaken will enable further growth in cargo handling volumes. I believe that, over time, we will start to increase our declared terminal capacity in terms of crude oil handling.

Regarding the ratio of crude oil handled at Naftoport to Poland's demand, can we say that Naftoport now supplies the entire country's needs?

Currently, Naftoport, along with the PERN pipeline and tank system - the major shareholder of the company - covers the entire demand for crude oil for Polish refineries and fulfills all domestic needs. Additionally, we also provide supplementary deliveries to refineries in Germany.

So, is it safe to say that Poland is now fully energy-independent when it comes to crude oil, and independent of supplies from Russia?

Yes, that can be confirmed. This process was very dynamic and was completed between December last year and February this year. Russian deliveries, both maritime and land-based, were reduced and eventually ceased. Poland is now fully energy-independent from Russia in terms of crude oil.

What security measures does Naftoport undertake, considering its crucial role in crude oil deliveries to Poland?

Of course, for security reasons, I cannot delve into specific details, but I can provide some general information.

Naftoport has a long and significant history of security services. As early as 2001, Naftoport received the ISPS certificate, making it the first port operator in Poland to do so. I would venture to say that it is the most secure civilian port facility in Poland, a fact confirmed by maritime authorities and other government agencies through relevant audits. Over twenty-something years of intensive work in this field, we have been able to develop traditional physical protection methods, introduce modern technical means of security, particularly those related to maritime safety, and, most importantly, build expert knowledge in this area.

Our security covers various sectors - land, sea and, recently, air as well. Naturally, we also comply with all requirements in the field of cybersecurity, essential for such facilities. We operate in all these areas, taking into account current threats, including those related to the use of unmanned vehicles. Our investments in this area are a crucial part of our security strategy. We also collaborate with relevant units to enhance the protection of our terminal infrastructure.

What is the significance of PERN's investments in storage infrastructure for the operational efficiency of Naftoport?

It should be emphasized that all the events of the last six years would not have been possible without the daily work of PERN and effectively implemented investments in our region. Besides the visible TNG oil terminal close by, the storage base for crude oil in Górki Zachodnie has also increased. This means that on the Gdańsk Coast, we now have a kind of raw materials hub with a capacity of up to 1.9 million tons. This is a massive tank capacity that contributes to the efficiency of our oil logistics system and refinery production. The increase in storage capacity in recent years has allowed the entire system to smoothly transition and adapt to the current intense mode of operation.