Williams urges Butinge deal with Dutch firm

  • 1998-10-22
VILNIUS (BNS) - The board of Lithuania's Butinges Nafta oil terminal will announce Oct. 23 that the Dutch firm Smit Maritime Contractors has won the rights to build a maritime section for the terminal.

The announcement is scheduled to follow the signing of a contract between Butinge and Smit, which even pays an advance, reported the Lietuvos rytas newspaper. The paper said the U.S.-based company Williams , which is purchasing one-third of the oil complex's stock, recommended the Dutch company. Williams intends at any price to begin exporting oil through Butinge before the end of this year.

According to the paper, the price proposed by Smit for the work - 18.4 million litas ($4.6 million) was not the lowest.

The terminal's general contractor, Germany's Preussag Wasser & Rohrtechnik, proposed performing the job for between 3.2million to 11.2 million litas less than Smit requested. In addition, Smit will not carry out all of the maritime section of construction.

According to Preussag representatives, Smit is not giving guarantees on the quality of work. If an accident occurs later, there will be no one to take responsibility for its consequences, the newspaper states.

Preussag, who has threatened to appeal to the London Court of Arbitration over lost projects, is going to be paid for losses experienced by having the order to construct a pumping station in Mazeikiai taken away. The losses will be covered by Butinges Nafta.

Preussag, which controls 21.4 percent of the Butinge terminal, is now constructing only the terminal itself. The protocol of intentions, signed by the administration and Williams, foresees that Preussag will sell its holdings to the Lithuanian state.