Mazeikiu Nafta gets crude

VILNIUS (BNS) - The Lithuanian oil concern Mazeikiu Nafta, which is one-third owned and operated by U.S. company Williams International, signed a three-year crude oil supply deal with the Kazakh oil company Karazhanbasmunai (KBM) in July, Williams announced Aug. 4.

Oil deliveries are expected to start in September. KBM, operated by the Canadian company Nations Energy, initially plans to deliver 70,000 tons of crude oil to Mazeikiai per month, and future supplies are expected to reach 100,000 to 120,000 tons monthly, according to Williams' statement.

Williams Lietuva general manager Randy Majors called the deal a major step toward stabilizing Mazeikiu Nafta's operations.

"We believe that KBM and other Kazakh companies are important partners," he said.

Russia also will benefit from the deal, because it will bring in additional incomes from oil transportation to the country, Majors said.

"Talks with the Russian national transportation company Transneft will be the next step in ensuring the implementation of the project," he said.

Last year Mazeikiu Nafta received 600,000 tons of oil from Kazakhstan, the second-largest oil supplier in the former Soviet Union. The country exports two-thirds of its oil output, which amounts to about 33 million tons per year.

Mazeikiu Nafta has been in talks on long-term cooperation with the Russian oil giant LUKoil, but the two companies are unlikely to close a deal until this autumn.

Mazeikiu Nafta and LUKoil signed a protocol of intent outlining principles of long-term cooperation in London in May that includes the establishment of joint supply and marketing companies. The deal should guarantee 6 million tons of Russian crude supplies to Mazeikiai annually.