Latvian railway and Statoil look for solution

  • 2000-11-02
RIGA (BNS) - The fuel company Statoil and state-owned railway Latvijas Dzelzcels have reached an agreement as to the steps taken to start fuel export through the Statoil terminal at the port of Riga, Latvia's Statoil head Baiba Rubesa said Oct. 31.

She said that at the talks between the Statoil president for the Baltic states and the Latvian railway general director an agreement was reached about short-term measures, namely revision of operational instructions, required to launch fuel exports.

The leaders of both companies also agreed to meet again to discuss long-term measures.

Rubesa said that it was the first eye-to-eye meeting between Statoil and Latvijas Dzelzcels heads to solve the conflict.

The conflict between Latvian railway and two fuel distributors, Latvia's Statoil and Neste Latvia, stems from refusal by the state-owned railway company to carry fuel for export to Neste and Statoil's terminal at the port of Riga due to technical problems at the Ziemelblazma railway station through which fuel has to be transported.

The national railway technical commission said oil products may not be exported through Ziemelblazma unless the terminal at the Riga port and the Ziemelblazma railway station are reconstructed.

The commission said that it's out of the question to take export cargo to Neste and Statoil's terminal through Ziemelblazma as the rails there are some 150 meters short for trains to make all required maneuvers, and at least one more railway branch should be built for the purpose.

The commission said the maximum capacity of Ziemelblazma is 2.1 million tons a year and, taking into account the forecasts, the amount to be transported through the station reaches 1.9 million tons, close to the critical mark.

Latvia's Statoil and Neste Latvia have said, however, that the amounts of cargo to be carried for their business needs will be significantly lower than 500,000 tons a year, an amount specified under the previously concluded agreement with Latvijas Dzelzcels. Therefore the two fuel companies believe it would be possible to transport fuel in both directions.

The Latvian Competition Council has launched a probe in the conflict at the request of both fuel companies.