Russian minister: pipeline to stay dry forever

  • 2007-11-21
  • From wire reports
VILNIUS - Russia's energy minister has said that the country would not supply any crude oil to Lithuania by pipeline, confirming fears that Mazeikiu Nafta's new owners are on their own in coming up with feedstock for the Baltics' only refinery.
Industry and Energy Minister Viktor Khristenko told the Lietuvos Rytas daily on the sidelines of the World Energy Congress in Rome that for Russian oil companies investing in a faulty pipeline made no economic sense.
"The companies realize their crude export plans via the Baltic pipeline system, where exports have now reached 45 million tons per year," Khristenko said.
The Baltic pipeline system was launched in late 2001 and has boosted Russia's export potential while decreasing its reliance on foreign terminals such as Ventspils, Latvia.
Khristenko said there were no sound economic reasons that would justify repairs to the pipeline that supplied crude to Lithuania.
He also dismissed any speculation about a "crude blockade" or other political reasons for Russia's failure to repair the pipeline.

The supply of crude to Lithuania ceased in July 2006 after the Mazeikiu Nafta refinery, the only one in the Baltics, was purchased by Poland's PKN Orlen.
Officials at Transneft, Russia's oil pipeline monopoly, said that the 42-year-old pipeline had ruptured and would require too much capital to repair.
However, Lithuanian officials have not been allowed to see the damaged section of the pipeline in Belarus, giving rise to suspicions that the reported damage is either minor or altogether non-existent.

Mazeikiu Nafta began refining crude again on Nov. 15 after a major overhaul. The refinery has been forced to import crude from as far away as Venezuela, which is considerably more expensive than Russian crude delivered by pipe.