LITHUANIA SHOOTS FOR PIPELINE PROJECT: A delegation from the Russian gas concern Gazprom will visit Lithuania to discuss the construction of a new natural gas pipeline to the Russian Kaliningrad region via Lithuania on Sept. 21 and 22. Lithuanian Economics Minister Vincas Babilius said Lithuania will construct the pipeline, while Gazprom will only be required to guarantee a steady supply of natural gas. The cost of the project is about 880 million litas ($220 million). Gazprom's stake in the project will be 33 percent at the most, the Lithuanian daily Lietuvos Rytas reported. "Our position in negotiations is that we do not want Gazprom to construct the pipeline. If the agreement can be reached with this condition, we will be able to start talking about Russian investment," Lietuvos Rytas quoted Babilius as saying. Lithuania will seek guarantees for natural gas supplies as well as a scheme of compensation in case Gazprom fails to keep to its commitments. Gazprom needs a new pipeline to Kaliningrad to boost its natural gas deliveries to the enclave to up to 2.5 billion cubic meters a year by 2005 and 3 billion cubic meters by 2010.
NEW SHIP CONNECTS ESTONIAN ISLANDS: The shipping company Saaremaa Laevakompanii is planning to transfer its biggest ship, the Ofelia, to the route connecting the Hiiumaa Island with the mainland. Tonis Rihvk, Saaremaa Laevakompanii managing director, said the ship will start carrying passengers and cars at end of October, when the sea way between the Hiiumaa and the mainland is completed. The Ofelia can take up to 110 cars and 800 passengers. After the Ofelia is transferred, one small ship will still sail between the Saaremaa Island and the mainland. "Traffic during the fall and winter seasons can be maintained by one big and one small ship," Rihvk said. Saaremaa Laevakompanii will buy a new ship for the Saaremaa route in spring. "Bids for the purchase of the new ship have already been made, but no ship has been chosen yet," Rihvk said.
LITHUANIAN GOVERNMENT BAILS OUT REFINERY: The Lithuanian Cabinet of Ministers voted to issue a loan to the oil refinery Mazeikiu Nafta to help it redeem its bonds Sept. 9. The cabinet will instruct the Privatization Fund to give Mazeikiu Nafta a short-term loan of $63.1 million at an annual interest rate of 9 percent. The government will also issue a guarantee for another $9.9 million loan promised by Lietuvos Taupomasis Bankas. In August, Western investors demanded that Mazeikiu Nafta prematurely redeem its $73 million bond issue, which was placed by the U.S. bank CS First Boston a year earlier. The company should redeem its bond issue by Sept. 14. Mazeikiu Nafta borrowed a total of 99 million litas ($24.75 million) from different sources. Mazeikiu Nafta Economic and Financial Director Vita Petrosiene said the refinery's Western partners promised to open credit lines for which no government guarantees are required. Each partner may lend $25-30 million to the refinery, she said.
RUSSIAN CRISIS HITS TRUCK TRANSPORTERS: The Russian crisis has had a negative effect on the Latvian truck transporters but will not ruin the branch. The crisis has hurt transporters which are working mostly on the Russian market, representatives of several transport companies said. MB Trans Director Olga Krasnogorska said the tariffs are declining significantly which negatively affects the company's work. The representative of the transport company SUEX Latvija confirmed tariff reduction was gradually setting in. The costs for transportation services were already lowered in August. ITC transport company's representative said for the time being he saw nothing "tragic" happening because of the Russian crisis.
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