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{{Short description|Subsidiary of Polish PKN Orlen}}
⚫
'''Mažeikių Nafta''' is a company centered around the Mažeikiai [[oil refinery]] and oil-processing plant in [[Lithuania]]. It includes the only refinery in the [[Baltic States]].
{{Infobox company
| name = Orlen Lietuva
| logo = Orlen Lietuva logo.jpg
| logo_caption = Orlen Lietuva logo
| logo_size = 221px
| image = ORLEN Lietuva.jpg
| image_caption = oil refinery near Mažeikiai
| image_size =
| trading_name =
| native_name =
| native_name_lang =
| industry = [[Oil]], [[petrol]]
| foundation =
| location_city = Juodeikiai, [[Mažeikiai District Municipality]]
| location_country = [[Lithuania]]
| revenue = {{increase}}€7.552 billion (2022)<ref name="Rekvizitai.vz.lt">{{cite web|title=ORLEN Lietuva, AB pajamos, pelnas|url=https://rekvizitai.vz.lt/imone/orlen_lietuva/apyvarta/}}</ref>
| operating_income =
| net_income = {{decrease}}-€162 million (2022)
| num_employees = 1387 (2019)
| parent = [[Orlen]]
| homepage = {{URL|www.orlenlietuva.lt}}
}}
⚫
'''Orlen Lietuva''' (former '''Mažeikių Nafta''') is a subsidiary of the [[Poland|Polish]] [[PKN Orlen]] and it owns the Mažeikiai [[oil refinery]] as well as the oil-processing plant in [[Lithuania]], the only oil refinery in the [[Baltic States]].


== Refinery ==
== Refinery ==
The '''Mažeikiai refinery''', located near the town of [[Mažeikiai]], has a design processing capacity of 15 million tons of [[crude oil]] per year. However, it is more efficient to process around 8 million tons of crude oil, while using the remaining capacity for processing other feedstock.<ref name="ABM-refinery">''[http://www.nafta.lt/en/content.php?pid=34 Mazeikiai Refinery]'', Mažeikių Nafta company website</ref> Historically, the primary feedstock has been Russian crude oil transported via the [[Druzhba pipeline]], however the relevant branch of this system has been closed in Russian territory<ref name="GW-1">''[http://gospodarka.gazeta.pl/gospodarka/1,33207,3794065.html Orlen i Możejki - finał przejęcia]'', [[Gazeta Wyborcza]], ([[15 December]], [[2006]]) {{pl icon}}.</ref> since July 2006,<ref name="ABM-druzhba">''[http://www.nafta.lt/en/news_item.php?pid=1&id=87 Interruptions in Crude Oil Supplies to Mazeikiu Nafta]'', Mažeikių Nafta company website (news message, 2006-07-31)</ref> apparently for repairs. Crude oil is now being supplied by the Būtingė Terminal (see below).<ref name="Reuters-1">''[http://www.alertnet.org/thenews/newsdesk/L12905213.htm Lithuania oil refinery blaze hits output]'', [[Reuters]], newsdesk ([[12 October]], [[2006]])</ref> The Mažeikiai refinery is the only oil refinery in the [[Baltic States]].
The '''Mažeikiai refinery''', located near the town of [[Mažeikiai]], has a design processing capacity of 15 million tons of [[crude oil]] per year. However, it is more efficient to process around 8 million tons of crude oil, while using the remaining capacity for processing other feedstock.<ref name="ABM-refinery">''[http://www.nafta.lt/en/content.php?pid=34 Mazeikiai Refinery] {{Webarchive|url=https://web.archive.org/web/20070927172402/http://www.nafta.lt/en/content.php?pid=34 |date=2007-09-27 }}'', Mažeikių Nafta company website</ref> Historically, the primary feedstock has been Russian crude oil transported via the [[Druzhba pipeline]], however the relevant branch of this system has been closed in Russian territory<ref name="GW-1">''[http://gospodarka.gazeta.pl/gospodarka/1,33207,3794065.html Orlen i Możejki - finał przejęcia]'', [[Gazeta Wyborcza]], (15 December 2006) {{in lang|pl}}.</ref> since July 2006,<ref name="ABM-druzhba">''[http://www.nafta.lt/en/news_item.php?pid=1&id=87 Interruptions in Crude Oil Supplies to Mazeikiu Nafta] {{Webarchive|url=https://web.archive.org/web/20060921171551/http://www.nafta.lt/en/news_item.php?pid=1&id=87 |date=2006-09-21 }}'', Mažeikių Nafta company website (news message, 2006-07-31)</ref> ostensibly for repairs. Crude oil is now being supplied by the [[Būtingė oil terminal]] (see below).<ref name="Reuters-1">''[http://www.alertnet.org/thenews/newsdesk/L12905213.htm Lithuania oil refinery blaze hits output]'', [[Reuters]], newsdesk (12 October 2006)</ref> The Mažeikiai refinery is the only oil refinery in the [[Baltic States]].


== Pipeline System ==
== Pipeline system ==
Mažeikių Nafta operates a system of pipelines with a total length of around 500 kilometers. This system includes two pump stations near [[Biržai]] and another near [[Joniškis]], crude oil pipelines to the [[Mažeikiai]] Refinery and [[Būtingė]] Terminal, a crude oil pipeline leading to [[Ventspils]], and another products pipeline supplying diesel fuel to the same location.
Mažeikių Nafta operates a system of pipelines with a total length of around 500 kilometers. This system includes two pump stations near [[Biržai]] and another near [[Joniškis]], crude oil pipelines to the [[Mažeikiai]] Refinery and [[Būtingė]] Terminal, a crude oil pipeline leading to [[Ventspils]], and another products pipeline supplying diesel fuel to the same location.
Construction of pipelines in Lithuania started in 1966, with the first crude oil being put through them in 1968.<ref name="ABM-pipeline">''[http://www.nafta.lt/en/content.php?pid=19 Pipeline System]'', Mažeikių Nafta company website</ref> In 1992, the company '''Naftotiekis''' was founded for the operation of Lithuanian pipelines, which became part of Mažeikių Nafta in 1998.
Construction of pipelines in Lithuania started in 1966, with the first crude oil being put through them in 1968.<ref name="ABM-pipeline">''[http://www.nafta.lt/en/content.php?pid=19 Pipeline System] {{Webarchive|url=https://web.archive.org/web/20070304154648/http://www.nafta.lt/en/content.php?pid=19 |date=2007-03-04 }}'', Mažeikių Nafta company website</ref> In 1992, the company '''Naftotiekis''' was founded for the operation of Lithuanian pipelines, which became part of Mažeikių Nafta in 1998.


== Būtingė Marine Terminal ==
== Būtingė Marine Terminal ==
The Būtingė Terminal is a state-of-the-art{{Fact|date=June 2007}} facility owned by Mažeikių Nafta, situated in an all-year-round ice-free area of the [[Baltic Sea]] on the Lithuanian coastline near the town of [[Būtingė]], north of [[Palanga]]. The project began in 1995 when the company '''Būtingės Nafta''' was established for the purpose of constructing and operating the Terminal. In 1998, Būtingės Nafta was merged into Mažeikių Nafta.
The [[Būtingė oil terminal]] is a facility owned by Mažeikių Nafta, situated in an all-year-round ice-free area of the [[Baltic Sea]] on the Lithuanian coastline near the town of [[Būtingė]], north of [[Palanga]]. The project began in 1995 when the company '''Būtingės Nafta''' was established for the purpose of constructing and operating the Terminal. In 1998, Būtingės Nafta was merged into Mažeikių Nafta.


The first tanker was loaded in Būtingė in the summer of 1999 and took on board a shipment of YUKOS crude oil. The Terminal can export up to 14 million tons of crude oil a year. But is also capable as an import terminal.
The first tanker was loaded in Būtingė in the summer of 1999 and took on board a shipment of YUKOS crude oil. The Terminal can export up to 14 million tons of crude oil a year but can also function as an import terminal.


During the construction of the facility, an environmental monitoring program was introduced that includes tests of sea and ground waters. With the start of the terminal operations, an expanded environmental monitoring program was launched. This included a computer-based leak detection system.
During the construction of the facility, an [[environmental monitoring]] program was introduced that includes tests of sea and ground waters. With the start of the terminal operations, an expanded environmental monitoring program was launched. This included a computer-based leak detection system.


The complex of the Būtingė Terminal consists of a crude oil pipeline that connects the facility with the Mažeikiai Refinery inland, onshore terminal equipment and tanks at Būtingė, an offshore pipeline, and a single point mooring (SPM) buoy<ref name="ABM-butinge">''[http://www.nafta.lt/en/content.php?pid=18 Marine Terminal]'', Mažeikių Nafta company website</ref> which lies 7km offshore.<ref name="GW-1"/>
The complex of the Būtingė Terminal consists of a crude oil pipeline that connects the facility with the Mažeikiai Refinery inland, onshore terminal equipment and tanks at Būtingė, an offshore pipeline, and a single point mooring (SPM) buoy<ref name="ABM-butinge">''[http://www.nafta.lt/en/content.php?pid=18 Marine Terminal] {{Webarchive|url=https://web.archive.org/web/20070304153840/http://www.nafta.lt/en/content.php?pid=18 |date=2007-03-04 }}'', Mažeikių Nafta company website</ref> which lies 7&nbsp;km offshore.<ref name="GW-1"/>


== Company ==
== Privatization ==
[[File:Gewinne_von_ORLEN_Lietuva.svg|thumb|500px|[[Profit and loss account]] in mln. USD<ref>{{cite web |url=http://raportzintegrowany2016.orlen.pl/pl-orlen-w-liczbach-pdf |title= ORLEN W LICZBACH PDF |website= PKN Orlen |language=pl |date=7 August 2017}}</ref>]]
According to a recent report,<ref name="ABM-finance">''[http://www.nafta.lt/en/news_item.php?pid=1&id=95 Mazeikiu Nafta Reported Results for Nine Months of 2006 and Revised Forecast for the Whole Year 2006]'', Mažeikių Nafta company website</ref> results for the ''first nine months'' of 2006 were as follows:
* 3,610 million $US revenue,
* 134 million $US net profit,
* Refined 6.77 million tons of crude oil and other feedstock,
* Sold 6.44 million tons of refined products,
* The Butinge terminal exported 2.93 million metric tons of crude oil, and imported 54 million metric tons.
The sales of Mazeikiu Nafta's products were split (by sales volume) as:
* 39% to [[Western Europe]]
* 22% to Lithuania
* 18% to the [[USA]]
* 7% to [[Estonia]]
* 7% to [[Latvia]]
* 5% to [[Poland]]
* 2% to [[Ukraine]] and [[Moldova]] (combined)


The company was first privatized by the Lithuanian government in 1999, when it was bought by [[Williams Companies]], a group based in the USA. Later, Williams ran into financial trouble and their stake in Mažeikių Nafta was bought by the Russian company [[Yukos]].<ref>[http://www.williams.com/newsroom/news_releases/2001/rel743.html Williams International and Russian YUKOS Sign Cooperation Agreement on Mazeikiu Nafta] {{Webarchive|url=https://web.archive.org/web/20101203063451/http://williams.com/newsroom/news_releases/2001/rel743.html |date=2010-12-03 }}. Retrieved on 22 April 2011.</ref>
== Sale of the Company ==
The company was first privatized by the Lithuanian government in 1999, when it was bought by Williams, a group based in the USA. Later, Williams ran into financial trouble, and their stake in Mažeikių Nafta was bought by the Russian company [[Yukos]]. However, in 2003 Yukos ran afoul of the Russian authorities and was required to pay billions of dollars in taxes. Facing bankruptcy, Yukos began to sell off its assets, including Mažeikių Nafta.<ref name="FT-1">''[http://www.ft.com/cms/s/05ff71f8-7b60-11db-bf9b-0000779e2340.html Baltic lessons for EU in dealing with a resurgent Russia]'', Financial Times, ([[November 24]], [[2006]]).</ref>
However, in 2003 Yukos ran afoul of the Russian authorities and was required to pay billions of dollars in taxes. Facing bankruptcy, Yukos began to sell off its assets, including Mažeikių Nafta.<ref name="FT-1"/>


Several potential buyers from [[Russia]], [[Kazakhstan]] and [[Poland]] showed interest in acquiring the refinery, whose majority stakeholder was now [[Yukos International]], a Yukos syndicate.<ref name="AB-sale">''[http://www.nafta.lt/en/news_item.php?pid=1&id=99 PKN Orlen Acquired Mazeikiu Nafta]'', Mažeikių Nafta company website (news, 15-12-2006)</ref> After several months of talks the proposal from Polish company [[PKN Orlen]] was found most lucrative and chosen. Additionally, it was deemed most desirable by Lithuania, which has been aiming to avoid the refinery and infrastructure being bought out by Russian interests.<ref name="FT-1"/>
Several potential buyers from [[Russia]], [[Kazakhstan]] and [[Poland]] showed interest in acquiring the refinery, whose majority stakeholder was now [[Yukos International]], a Yukos syndicate.<ref name="AB-sale">''[http://www.nafta.lt/en/news_item.php?pid=1&id=99 PKN Orlen Acquired Mazeikiu Nafta] {{webarchive|url=https://web.archive.org/web/20070927172337/http://www.nafta.lt/en/news_item.php?pid=1&id=99 |date=2007-09-27 }}'', Mažeikių Nafta company website (news, 15-12-2006)</ref> After several months of talks the proposal from Polish company [[PKN Orlen]] was found most lucrative and chosen. Additionally, it was deemed most desirable by Lithuania, which has been aiming to avoid the refinery and infrastructure being bought out by Russian interests due to the [[national security]] concerns.<ref name="FT-1"/> To force the sale to Yukos for lower price, Russia has shut down the only land pipeline, which [[New York Times]] described as "tools for intimidation and blackmail".<ref>{{Cite news|url=https://www.nytimes.com/2006/10/27/business/worldbusiness/27iht-embargo.3312013.html?pagewanted=all|title=Lithuania suspects Russian oil grab - Business - International Herald Tribune - The New York Times|author=Andrew E. Kramer|work=The New York Times |date=27 October 2006 |access-date=2016-03-17}}</ref>


The agreement between Orlen and Yukos International to buy out the latter's 53.7% stake in the company, was made in June 2006. Several weeks later, PKN Orlen signed a deal with the Lithuanian government to buy a further 30.66%. The [[European Union]]'s regulatory authority approved the deal on November 7, after ruling that it would not significantly harm competition in the European economic area or any substantial part of it.<ref name="BalticTimes-2"/> The buyout was finalized on [[15 December]], [[2006]], with USD 1,492,000,000 being paid by PKN Orlen to Yukos International, and USD 851,828,900.31 to the Lithuanian Government.<ref name="AB-sale"/>
The agreement between Orlen and Yukos International to buy out the latter's 53.7% stake in the company, was made in June 2006. Several weeks later, PKN Orlen signed a deal with the Lithuanian government to buy a further 30.66%. The [[European Union]]'s regulatory authority approved the deal on November 7, after ruling that it would not significantly harm competition in the European economic area or any substantial part of it.<ref name="BalticTimes-2"/> The buyout was finalized on 15 December 2006, with US$1.492 billion paid by PKN Orlen to Yukos International, and US$851.8 million to the Lithuanian Government.<ref name="AB-sale"/>


==Russian hostilities==
==Major fire in October 2006==
===Druzhba pipeline Lithuanian branch shutdown===
⚫
On [[October 12]] [[2006]], a major fire erupted in the plant around 2:30 pm. The cause appears to have been a leak. The fire was extinguished after 8 pm the same day,<ref name=ABM-fire">''[http://www.nafta.lt/en/news_item.php?pid=1&id=91 Regarding Fire at AB Mazeikiu Nafta]'', Mažeikių Nafta company website</ref> although some spot fires were still being put out the next day.<ref name="BalticTimes-1">''[http://www.baltictimes.com/news/articles/16596/ Blaze at Mazeikiu Nafta threatens PKN Orlen deal]'', The Baltic Times, ([[18 October]], [[2006]]).</ref> During the fire, a 50 meter height vacuum tower collapsed, oil products leaked out, and a series of explosions were heard; The blaze covered about 800 square meters at one point. 23 firefighting vehicles were brought into the scene of the accident and eyewitness accounts said that fires reached 150m in height and could be seen from several kilometers away. A Black cloud of smoke could be seen from a great distance, and drifted towards the nearby [[Latvia]]n border. There were no casualties among personnel.<ref name="Reuters-1"/>
[[File:AB_Mazeikiu_nafta4a.jpg|thumb|Mažeikiai oil refinery in 2006]]
On 29 July 2006 Russia shut down oil export to [[Mažeikių Nafta|Mažeikių oil refinery]] in [[Lithuania]] after an oil spill on the [[Druzhba pipeline]] system occurred in Russia's [[Bryansk Oblast|Bryansk oblast]], near the point where a line to Belarus and Lithuania branches off the main export pipeline. Transneft said it would need one year and nine months to repair the damaged section. Although Russia cited technical reasons for stopping oil deliveries to Lithuania, Lithuania claims that the oil supply was stopped because Lithuania sold the Mažeikių refinery to Polish company [[PKN Orlen]]<ref>[http://www.jamestown.org/publications_details.php?volume_id=414&issue_id=3822&article_id=2371343 Russian oil supplies to Lithuania cut off] {{webarchive|url=https://web.archive.org/web/20061121034522/http://www.jamestown.org/publications_details.php?volume_id=414&issue_id=3822&article_id=2371343 |date=21 November 2006 }}, by Vladimis Socor, Eurasia Daily Monitor Volume 3, Issue 150 (3 August 2006)</ref> in an effort to avoid the refinery and infrastructure being bought out by Russian interests.<ref name="FT-1">''[http://www.ft.com/cms/s/05ff71f8-7b60-11db-bf9b-0000779e2340.html Baltic lessons for EU in dealing with a resurgent Russia]'', Financial Times, (24 November 2006)</ref> Russian crude oil is now being transshipped via the [[Būtingė oil terminal]].


===Fire===
Damages incurred are estimated around 38 million Euro, as well as around 30 million in lost revenue due to production losses.<ref name="BalticTimes-2">''[http://www.eubusiness.com/Energy/061118154207.38gvp6w8 PKN Orlen buy out of Lithuania's Mazeikiu due on December 15]'', The Baltic Times ([[18 November]], [[2006]])</ref> While significant, when compared with the total output and profits of the plant, they are not as large as had been feared.
⚫
On October 12, 2006, a major fire erupted in the plant around 2:30 pm. The cause appears to have been a leak. The fire was extinguished after 8 pm the same day,<ref name="ABM-fire">''[http://www.nafta.lt/en/news_item.php?pid=1&id=91 Regarding Fire at AB Mazeikiu Nafta] {{Webarchive|url=https://web.archive.org/web/20070927172321/http://www.nafta.lt/en/news_item.php?pid=1&id=91 |date=2007-09-27 }}'', Mažeikių Nafta company website</ref> although some spot fires were still being put out the next day.<ref name="BalticTimes-1">''[http://www.baltictimes.com/news/articles/16596/ Blaze at Mazeikiu Nafta threatens PKN Orlen deal]'', The Baltic Times, (18 October 2006).</ref> During the fire, a 50-meter height vacuum tower collapsed, oil products leaked out, and a series of explosions were heard; The blaze covered about 800 square meters at one point. 23 firefighting vehicles were brought to the scene of the accident and eyewitness accounts said that fires reached 150m in height and could be seen from several kilometers away. A black cloud of smoke could be seen from a great distance, and drifted towards the nearby [[Latvia]]n border. There were no casualties among personnel.<ref name="Reuters-1"/> Damages incurred are estimated at around 38 million Euro, as well as around 30 million in lost revenue due to production losses.<ref name="BalticTimes-2">''[http://www.eubusiness.com/Energy/061118154207.38gvp6w8 PKN Orlen buy out of Lithuania's Mazeikiu due on December 15]'', The Baltic Times (18 November 2006)</ref> While significant, when compared with the total output and profits of the plant, they are not as large as had been feared. Initially, after the fire, serious doubts were raised by various media over whether PKN Orlen would go through with the deal to buy the company (although these were immediately denied by Orlen representatives).<ref name="Reuters-1"/><ref name="BalticTimes-1"/> In the end, the blaze did not stop the deal from going ahead. Suspicions were raised by various high-profile persons as to whether the fire was an accident, or industrial sabotage on the part of the Russian energy companies in revenge for not being offered to buy the company.<ref name="BalticTimes-1"/> The vice-leader of the [[Russian Duma]], [[Konstantin Kosachev]], stated that "instability will continue to plague the refinery until the Lithuanians finally realize which partners one should choose" only a few hours before the start of the blaze.<ref name="GW-1"/>


⚫
==References==
Initially, after the fire, serious doubts were raised by various media over whether PKN Orlen would go through with the deal to buy the company (although these were immediately demented by Orlen representatives).<ref name="BalticTimes-1"/><ref name="Reuters-1"/> In the end, the blaze did not stop the takeover from going ahead.
{{Reflist}}

Suspicions were raised by various high-profile persons as to whether the fire was an accident, or industrial sabotage on the part of the Russian energy companies in revenge for not being offered to buy the company.<ref name="BalticTimes-1"/> Notably, perhaps, the vice-leader of the [[Russian Duma]], [[Konstantin Kosachov]] had said that "instability will continue to plague the refinery until the Lithuanians finally realize which partners one should choose" only a few hours before the start of the blaze.<ref name="GW-1"/> However, no evidence of foul play has been revealed since the blaze.


==External links==
==External links==
{{Commons category-inline}}
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*[http://www.nafta.lt/en/ Mažeikių Nafta Company Website]
* [https://archive.today/20130218235209/http://www.orlenlietuva.lt/en/main/news/news?id=3665 New Installations Started their Trip from Klaipeda to Mazeikiai]
* [https://archive.today/20130219000649/http://www.orlenlietuva.lt/en/main/news/news?id=5474 AB Mažeikių Nafta Modernized Installations in Record Time]
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*[http://www.nafta.lt/en/ Orlen Lietuva Company Website]


{{Authority control}}
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==References==
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{{Coord|56|23|22|N|22|10|17|E|type:landmark|display=title}}
<references/>


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{{DEFAULTSORT:Orlen Lietuva}}
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{{coor title dms|56|23|22|N|22|10|17|E|type:landmark}}

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{{DEFAULTSORT:Mazeikiu Nafta}}
[[Category:Oil companies of Lithuania]]
[[Category:Oil companies of Lithuania]]
[[Category:Companies listed on the Vilnius Stock Exchange]]
[[Category:Companies listed on Nasdaq Vilnius]]
[[Category:Oil refineries in Lithuania]]
[[Category:Oil refineries in Lithuania]]
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[[Category:Buildings and structures in Lithuania]]
[[Category:Buildings and structures built in the Soviet Union]]
[[Category:Buildings and structures built in the Soviet Union]]
[[Category:Oil companies of the Soviet Union]]

[[Category:Non-renewable resource companies established in 1964]]
[[de:Mažeikių nafta]]
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[[Category:1964 establishments in Lithuania]]
[[lt:Mažeikių nafta]]
[[Category:Companies based in Mažeikiai]]
[[nl:Mažeikių Nafta]]
[[Category:Oil refineries in the Soviet Union]]
[[pl:Mažeikių Nafta]]
[[ru:Mažeikių nafta]]
[[bat-smg:Mažeikiu nėpta]]

Latest revision as of 21:13, 4 September 2024

Orlen Lietuva
IndustryOil, petrol
Headquarters
Juodeikiai, Mažeikiai District Municipality
,
Lithuania
RevenueIncrease€7.552 billion (2022)[1]
Decrease-€162 million (2022)
Number of employees
1387 (2019)
ParentOrlen
Websitewww.orlenlietuva.lt

Orlen Lietuva (former Mažeikių Nafta) is a subsidiary of the Polish PKN Orlen and it owns the Mažeikiai oil refinery as well as the oil-processing plant in Lithuania, the only oil refinery in the Baltic States.

Refinery

[edit]

The Mažeikiai refinery, located near the town of Mažeikiai, has a design processing capacity of 15 million tons of crude oil per year. However, it is more efficient to process around 8 million tons of crude oil, while using the remaining capacity for processing other feedstock.[2] Historically, the primary feedstock has been Russian crude oil transported via the Druzhba pipeline, however the relevant branch of this system has been closed in Russian territory[3] since July 2006,[4] ostensibly for repairs. Crude oil is now being supplied by the Būtingė oil terminal (see below).[5] The Mažeikiai refinery is the only oil refinery in the Baltic States.

Pipeline system

[edit]

Mažeikių Nafta operates a system of pipelines with a total length of around 500 kilometers. This system includes two pump stations near Biržai and another near Joniškis, crude oil pipelines to the Mažeikiai Refinery and Būtingė Terminal, a crude oil pipeline leading to Ventspils, and another products pipeline supplying diesel fuel to the same location. Construction of pipelines in Lithuania started in 1966, with the first crude oil being put through them in 1968.[6] In 1992, the company Naftotiekis was founded for the operation of Lithuanian pipelines, which became part of Mažeikių Nafta in 1998.

Būtingė Marine Terminal

[edit]

The Būtingė oil terminal is a facility owned by Mažeikių Nafta, situated in an all-year-round ice-free area of the Baltic Sea on the Lithuanian coastline near the town of Būtingė, north of Palanga. The project began in 1995 when the company Būtingės Nafta was established for the purpose of constructing and operating the Terminal. In 1998, Būtingės Nafta was merged into Mažeikių Nafta.

The first tanker was loaded in Būtingė in the summer of 1999 and took on board a shipment of YUKOS crude oil. The Terminal can export up to 14 million tons of crude oil a year but can also function as an import terminal.

During the construction of the facility, an environmental monitoring program was introduced that includes tests of sea and ground waters. With the start of the terminal operations, an expanded environmental monitoring program was launched. This included a computer-based leak detection system.

The complex of the Būtingė Terminal consists of a crude oil pipeline that connects the facility with the Mažeikiai Refinery inland, onshore terminal equipment and tanks at Būtingė, an offshore pipeline, and a single point mooring (SPM) buoy[7] which lies 7 km offshore.[3]

Privatization

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Profit and loss account in mln. USD[8]

The company was first privatized by the Lithuanian government in 1999, when it was bought by Williams Companies, a group based in the USA. Later, Williams ran into financial trouble and their stake in Mažeikių Nafta was bought by the Russian company Yukos.[9] However, in 2003 Yukos ran afoul of the Russian authorities and was required to pay billions of dollars in taxes. Facing bankruptcy, Yukos began to sell off its assets, including Mažeikių Nafta.[10]

Several potential buyers from Russia, Kazakhstan and Poland showed interest in acquiring the refinery, whose majority stakeholder was now Yukos International, a Yukos syndicate.[11] After several months of talks the proposal from Polish company PKN Orlen was found most lucrative and chosen. Additionally, it was deemed most desirable by Lithuania, which has been aiming to avoid the refinery and infrastructure being bought out by Russian interests due to the national security concerns.[10] To force the sale to Yukos for lower price, Russia has shut down the only land pipeline, which New York Times described as "tools for intimidation and blackmail".[12]

The agreement between Orlen and Yukos International to buy out the latter's 53.7% stake in the company, was made in June 2006. Several weeks later, PKN Orlen signed a deal with the Lithuanian government to buy a further 30.66%. The European Union's regulatory authority approved the deal on November 7, after ruling that it would not significantly harm competition in the European economic area or any substantial part of it.[13] The buyout was finalized on 15 December 2006, with US$1.492 billion paid by PKN Orlen to Yukos International, and US$851.8 million to the Lithuanian Government.[11]

Russian hostilities

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Druzhba pipeline Lithuanian branch shutdown

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Mažeikiai oil refinery in 2006

On 29 July 2006 Russia shut down oil export to Mažeikių oil refinery in Lithuania after an oil spill on the Druzhba pipeline system occurred in Russia's Bryansk oblast, near the point where a line to Belarus and Lithuania branches off the main export pipeline. Transneft said it would need one year and nine months to repair the damaged section. Although Russia cited technical reasons for stopping oil deliveries to Lithuania, Lithuania claims that the oil supply was stopped because Lithuania sold the Mažeikių refinery to Polish company PKN Orlen[14] in an effort to avoid the refinery and infrastructure being bought out by Russian interests.[10] Russian crude oil is now being transshipped via the Būtingė oil terminal.

Fire

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On October 12, 2006, a major fire erupted in the plant around 2:30 pm. The cause appears to have been a leak. The fire was extinguished after 8 pm the same day,[15] although some spot fires were still being put out the next day.[16] During the fire, a 50-meter height vacuum tower collapsed, oil products leaked out, and a series of explosions were heard; The blaze covered about 800 square meters at one point. 23 firefighting vehicles were brought to the scene of the accident and eyewitness accounts said that fires reached 150m in height and could be seen from several kilometers away. A black cloud of smoke could be seen from a great distance, and drifted towards the nearby Latvian border. There were no casualties among personnel.[5] Damages incurred are estimated at around 38 million Euro, as well as around 30 million in lost revenue due to production losses.[13] While significant, when compared with the total output and profits of the plant, they are not as large as had been feared. Initially, after the fire, serious doubts were raised by various media over whether PKN Orlen would go through with the deal to buy the company (although these were immediately denied by Orlen representatives).[5][16] In the end, the blaze did not stop the deal from going ahead. Suspicions were raised by various high-profile persons as to whether the fire was an accident, or industrial sabotage on the part of the Russian energy companies in revenge for not being offered to buy the company.[16] The vice-leader of the Russian Duma, Konstantin Kosachev, stated that "instability will continue to plague the refinery until the Lithuanians finally realize which partners one should choose" only a few hours before the start of the blaze.[3]

References

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  1. ^ "ORLEN Lietuva, AB pajamos, pelnas".
  2. ^ Mazeikiai Refinery Archived 2007-09-27 at the Wayback Machine, Mažeikių Nafta company website
  3. ^ a b c Orlen i Możejki - finał przejęcia, Gazeta Wyborcza, (15 December 2006) (in Polish).
  4. ^ Interruptions in Crude Oil Supplies to Mazeikiu Nafta Archived 2006-09-21 at the Wayback Machine, Mažeikių Nafta company website (news message, 2006-07-31)
  5. ^ a b c Lithuania oil refinery blaze hits output, Reuters, newsdesk (12 October 2006)
  6. ^ Pipeline System Archived 2007-03-04 at the Wayback Machine, Mažeikių Nafta company website
  7. ^ Marine Terminal Archived 2007-03-04 at the Wayback Machine, Mažeikių Nafta company website
  8. ^ "ORLEN W LICZBACH PDF". PKN Orlen (in Polish). 7 August 2017.
  9. ^ Williams International and Russian YUKOS Sign Cooperation Agreement on Mazeikiu Nafta Archived 2010-12-03 at the Wayback Machine. Retrieved on 22 April 2011.
  10. ^ a b c Baltic lessons for EU in dealing with a resurgent Russia, Financial Times, (24 November 2006)
  11. ^ a b PKN Orlen Acquired Mazeikiu Nafta Archived 2007-09-27 at the Wayback Machine, Mažeikių Nafta company website (news, 15-12-2006)
  12. ^ Andrew E. Kramer (27 October 2006). "Lithuania suspects Russian oil grab - Business - International Herald Tribune - The New York Times". The New York Times. Retrieved 2016-03-17.
  13. ^ a b PKN Orlen buy out of Lithuania's Mazeikiu due on December 15, The Baltic Times (18 November 2006)
  14. ^ Russian oil supplies to Lithuania cut off Archived 21 November 2006 at the Wayback Machine, by Vladimis Socor, Eurasia Daily Monitor Volume 3, Issue 150 (3 August 2006)
  15. ^ Regarding Fire at AB Mazeikiu Nafta Archived 2007-09-27 at the Wayback Machine, Mažeikių Nafta company website
  16. ^ a b c Blaze at Mazeikiu Nafta threatens PKN Orlen deal, The Baltic Times, (18 October 2006).
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Media related to Orlen Lietuva at Wikimedia Commons

56°23′22″N 22°10′17″E / 56.38944°N 22.17139°E / 56.38944; 22.17139

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