Refinery shuts down for major repairs

  • 2007-09-26
  • Staff and wire reports
VILNIUS - The Baltics' only crude oil refinery, Mazeikiu Nafta, shut down on Sept. 23 for a maintenance overhaul that will last approximately six weeks. The last such repairs were made in 2003.
In the words of spokesman Rosvaldas Gorbaciovas, the shutdown required two days and it was unclear when exactly the refinery, the largest corporation in Lithuania, would reopen. "We will do our best to keep to the schedule, but at the moment we cannot give an exact date when the plant will be restarted," he added.
The Polish-owned Mazeikiu Nafta has stocked sufficient supplies of oil refinery products to meet demand on the Baltic and Ukrainian markets, Gorbaciovas said.

More than 4,000 people will be involved in the repair overhaul, including 1,600 Lithuanian staff. The remaining workforce will come from abroad, mostly from Poland, the spokesman said.
Mazeikiu Nafta CEO Marek Mroczkowski stated that the maintenance would cost an estimated $80 million, including the cost of replacing some old equipment with new equipment.
The refinery also expects in the final months of 2007 to restart the vacuum distillation unit that was destroyed in a major fire a year ago. This will allow the plant to return to full capacity.
Mazeikiu Nafta, which is owned by Poland's PKN Orlen, posted 50.6 million litas (14.6 million euros) in consolidated net losses for the first half of this year, compared with net profits of 371.3 million litas in the same period in 2006.

Meanwhile, a Ukrainian energy analyst has given the refinery a bleak outlook, claiming that the pipeline from Russia, which was shut down in July last year, will remain closed forever.
"This pipeline does suffer from various faults and problems, but I don't believe this is the main reason (behind the closure)," Vladimir Saprykin, a director at the Alexander Razumkov Center for Economic and Political Studies in Ukraine, told the Lietuvos Rytas daily.

"The key motives driving Russia are both economic and political. To be more exact, Moscow has long been drawing up grandiose plans with regard to its neighbors and trying to carry them out."
Both Russian authorities and big energy producers have decided that Russia's raw materials should be supplied to Western Europe directly, bypassing the neighboring countries, Saprykin said.
Russia ceased pumping oil through the Druzhba pipeline to Lithuania in the summer of 2006, forcing Mazeikiu Nafta to import crude through the Butinge terminal on the Baltic Sea, which is more expensive.
Lithuanian officials have hinted that they are looking for alternative supply routes in the Caucasus and Europe, the paper wrote.