Mazeikiu, Klaipeda to be linked

  • 2007-09-12
  • From wire reports
VILNIUS - A pipeline linking the Mazeikiu Nafta oil refinery with the Klaipeda port could be ready by 2010 at the earliest, a company official was quoted as saying.
Krystian Pater, a refinery board member in charge of production at both Mazeikiu Nafta and PKN Orlen, the Polish corporation that owns the Lithuanian refinery, was quoted on the Internet news site as giving this approximate timetable.

Current plans call for both a product pipeline and a crude oil pipeline linking Mazeikiu Nafta to Klaipedos Nafta, a state-owned oil terminal in the port of Klaipeda. The product pipeline would be used to export refined Mazeikiu Nafta products, while the crude pipeline would be used to import crude oil via the seaport.
Since Russia ceased delivering crude oil to Lithuania in July 2006, the refinery is forced to import crude via the Butinge terminal, which it owns, on the Baltic Sea. The tanker-delivered crude is more expensive than oil pumped through pipelines, and the refinery has seen its profitability nosedive.
"We understand that our proposal to invest our capital in Klaipedos Nafta is difficult to implement. This would require amending the law. Therefore, we are open to various proposals," Piotr Kownacki, board chairman of both Mazeikiu Nafta and PKN Orlen, was quoted by the portal as saying.

Previously officials from PKN Orlen, which finalized the $2.3 billion purchase of the Lithuanian refinery in December, hinted at a preparedness to buy Klaipedos Nafta.
Without ownership, even partial, of the oil terminal, the Poles are unlikely to want to plow the funds into building a new pipeline.
Still, Kownacki added that legal obstacles did not mean that the group was abandoning its ambitions to buy Klaipedos Nafta.
"We are considering other options as well. An oil pipeline is an investment that takes a long time to pay off. Before building it, we have to be certain that the situation will not change once it is built. We need to know if it will be possible to hook up to the terminal's facilities and how much that would cost us," he said.
The Economy Ministry has appointed a task group to look into PKN Orlen's proposal.
Meanwhile, the port of Klaipeda announced Sept. 7 that it has handled 18.1 million tons of cargo during the first eight months of this year, a 16.4 percent rise over the same time last year. In August alone, cargo traffic through the port of Klaipeda grew by 27.7 percent year-on-year to 2.5 million tons.

Oil products turnover increased 5.9 percent year-on-year to 5.2 million tons.
The Butinge terminal, which is owned by Mazeikiu Nafta, announced that it has handled 3.4 million tons of crude oil in the first eight months of this year, an 11 percent drop year-on-year.