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Orlen Lietuva (former Mažeikių Nafta) is a subsidiary of the
Polish Polish may refer to: * Anything from or related to Poland, a country in Europe * Polish language * Poles, people from Poland or of Polish descent * Polish chicken *Polish brothers (Mark Polish and Michael Polish, born 1970), American twin screenwr ...
PKN Orlen Polski Koncern Naftowy Orlen Spółka Akcyjna (PKN Orlen S.A.), commonly known as Orlen, is a Polish oil refiner and petrol retailer. The corporation is a significant European publicly traded firm with major operations in Poland, Czech Republic, ...
and it owns the Mažeikiai
oil refinery An oil refinery or petroleum refinery is an industrial process plant where petroleum (crude oil) is transformed and refined into useful products such as gasoline (petrol), diesel fuel, asphalt base, fuel oils, heating oil, kerosene, lique ...
as well as the oil-processing plant in
Lithuania Lithuania (; lt, Lietuva ), officially the Republic of Lithuania ( lt, Lietuvos Respublika, links=no ), is a country in the Baltic region of Europe. It is one of three Baltic states and lies on the eastern shore of the Baltic Sea. Lithuania ...
. It is the only oil refinery in the
Baltic States The Baltic states, et, Balti riigid or the Baltic countries is a geopolitical term, which currently is used to group three countries: Estonia, Latvia, and Lithuania. All three countries are members of NATO, the European Union, the Eurozone, ...
.


Refinery

The Mažeikiai refinery, located near the town of
Mažeikiai Mažeikiai (; Samogitian: ''Mažeikē''; lv, Mažeiķi) is a city in northwestern Lithuania, on the Venta River. It has a population of around 43,547, making it the eighth largest city in Lithuania. The city is the administrative center of Ma ...
, has a design processing capacity of 15 million tons of
crude oil Petroleum, also known as crude oil, or simply oil, is a naturally occurring yellowish-black liquid mixture of mainly hydrocarbons, and is found in geological formations. The name ''petroleum'' covers both naturally occurring unprocessed crude ...
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.
Mazeikiai Refinery
'', Mažeikių Nafta company website
Historically, the primary feedstock has been Russian crude oil transported via the
Druzhba pipeline The Druzhba pipeline (russian: нефтепровод «Дружба»; also has been referred to as the Friendship Pipeline and the Comecon Pipeline) is one of the world's longest oil pipelines and one of the largest oil pipeline networks in th ...
, however the relevant branch of this system has been closed in Russian territory
Orlen i Możejki - finał przejęcia
',
Gazeta Wyborcza ''Gazeta Wyborcza'' (; ''The Electoral Gazette'' in English) is a Polish daily newspaper based in Warsaw, Poland. It is the first Polish daily newspaper after the era of "real socialism" and one of Poland's newspapers of record, covering the g ...
, (15 December 2006) .
since July 2006,
Interruptions in Crude Oil Supplies to Mazeikiu Nafta
'', Mažeikių Nafta company website (news message, 2006-07-31)
ostensibly for repairs. Crude oil is now being supplied by the
Būtingė oil terminal Būtingė oil terminal ( lt, Būtingės naftos terminalas) is an oil terminal near the village of Būtingė in northern Lithuania. Planned, designed and implemented by Fluor Corporation, it is a part of ORLEN Lietuva (formerly ''Mažeikių Nafta'' ...
(see below).
Lithuania oil refinery blaze hits output
',
Reuters Reuters ( ) is a news agency owned by Thomson Reuters Corporation. It employs around 2,500 journalists and 600 photojournalists in about 200 locations worldwide. Reuters is one of the largest news agencies in the world. The agency was estab ...
, newsdesk (12 October 2006)
The Mažeikiai refinery is the only oil refinery in the
Baltic States The Baltic states, et, Balti riigid or the Baltic countries is a geopolitical term, which currently is used to group three countries: Estonia, Latvia, and Lithuania. All three countries are members of NATO, the European Union, the Eurozone, ...
.


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 Biržai (, known also by several #Names, alternative names) is a town in northern Lithuania. Biržai is famous for its reconstructed Biržai Castle Manor house, manor, and the whole region is renowned for its many traditional-recipe beer brewerie ...
and another near
Joniškis Joniškis (; Samogitian language, Samogitian: ''Juonėškis'') is a town in northern Lithuania with a population of about 9,900. It is located 39 kilometers north of Šiauliai and 14 kilometers south of the Lithuania–Latvia border. Joniškis i ...
, crude oil pipelines to the
Mažeikiai Mažeikiai (; Samogitian: ''Mažeikē''; lv, Mažeiķi) is a city in northwestern Lithuania, on the Venta River. It has a population of around 43,547, making it the eighth largest city in Lithuania. The city is the administrative center of Ma ...
Refinery and
Būtingė Būtingė (German: ''Butendiekshof'' or ''Budendiekshof'') is a small village at the coast of the Baltic Sea in the north of Lithuania, at the border to Latvia. It belongs to Palanga City Municipality, and is situated north of the town Palanga. ...
Terminal, a crude oil pipeline leading to
Ventspils Ventspils (; german: Windau, ; see other names) is a state city in northwestern Latvia in the historical Courland region of Latvia, and is the sixth largest city in the country. At the beginning of 2020, Ventspils had a population of 33,906. It ...
, 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.
Pipeline System
'', Mažeikių Nafta company website
In 1992, the company Naftotiekis was founded for the operation of Lithuanian pipelines, which became part of Mažeikių Nafta in 1998.


Būtingė Marine Terminal

The
Būtingė oil terminal Būtingė oil terminal ( lt, Būtingės naftos terminalas) is an oil terminal near the village of Būtingė in northern Lithuania. Planned, designed and implemented by Fluor Corporation, it is a part of ORLEN Lietuva (formerly ''Mažeikių Nafta'' ...
is a facility owned by Mažeikių Nafta, situated in an all-year-round ice-free area of the
Baltic Sea The Baltic Sea is an arm of the Atlantic Ocean that is enclosed by Denmark, Estonia, Finland, Germany, Latvia, Lithuania, Poland, Russia, Sweden and the North and Central European Plain. The sea stretches from 53°N to 66°N latitude and from ...
on the Lithuanian coastline near the town of
Būtingė Būtingė (German: ''Butendiekshof'' or ''Budendiekshof'') is a small village at the coast of the Baltic Sea in the north of Lithuania, at the border to Latvia. It belongs to Palanga City Municipality, and is situated north of the town Palanga. ...
, north of
Palanga Palanga (; bat-smg, Palonga; pl, Połąga; german: Polangen) is a seaside resort town in western Lithuania, on the shore of the Baltic Sea. Palanga is the busiest summer resort in Lithuania and has sandy beaches (18 km, 11 miles long ...
. 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
Marine Terminal
'', Mažeikių Nafta company website
which lies 7 km offshore.


Privatization

The company was first privatized by the Lithuanian government in 1999, when it was bought by
Williams Companies The Williams Companies, Inc., is an American energy company based in Tulsa, Oklahoma. Its core business is natural gas processing and transportation, with additional petroleum and electricity generation assets. A Fortune 500 company, its commo ...
, 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 OJSC "Yukos Oil Company" (russian: ОАО Нефтяна́я Компа́ния Ю́КОС, links=no, ) was an oil and gas company based in Moscow, Russia. Yukos was acquired from the Russian government by Russian oligarch Mikhail Khodorkovs ...
. 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.
Baltic lessons for EU in dealing with a resurgent Russia
', Financial Times, (November 24, 2006).
Several potential buyers from
Russia Russia (, , ), or the Russian Federation, is a List of transcontinental countries, transcontinental country spanning Eastern Europe and North Asia, Northern Asia. It is the List of countries and dependencies by area, largest country in the ...
,
Kazakhstan Kazakhstan, officially the Republic of Kazakhstan, is a transcontinental country located mainly in Central Asia and partly in Eastern Europe. It borders Russia to the north and west, China to the east, Kyrgyzstan to the southeast, Uzbeki ...
and
Poland Poland, officially the Republic of Poland, is a country in Central Europe. It is divided into 16 administrative provinces called voivodeships, covering an area of . Poland has a population of over 38 million and is the fifth-most populous ...
showed interest in acquiring the refinery, whose majority stakeholder was now Yukos International, a Yukos syndicate.
PKN Orlen Acquired Mazeikiu Nafta
'', Mažeikių Nafta company website (news, 15-12-2006)
After several months of talks the proposal from Polish company
PKN Orlen Polski Koncern Naftowy Orlen Spółka Akcyjna (PKN Orlen S.A.), commonly known as Orlen, is a Polish oil refiner and petrol retailer. The corporation is a significant European publicly traded firm with major operations in Poland, Czech Republic, ...
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 National security, or national defence, is the security and defence of a sovereign state, including its citizens, economy, and institutions, which is regarded as a duty of government. Originally conceived as protection against military atta ...
concerns. To force the sale to Yukos for lower price, Russia has shut down the only land pipeline, which
New York Times ''The New York Times'' (''the Times'', ''NYT'', or the Gray Lady) is a daily newspaper based in New York City with a worldwide readership reported in 2020 to comprise a declining 840,000 paid print subscribers, and a growing 6 million paid d ...
described as "tools for intimidation and blackmail". 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 The European Union (EU) is a supranational political and economic union of member states that are located primarily in Europe. The union has a total area of and an estimated total population of about 447million. The EU has often been des ...
'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. The buyout was finalized on 15 December 2006, with $1.492 billion USD paid by PKN Orlen to Yukos International, and $851.8 million USD to the Lithuanian Government.


Fire of 2006

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,
Regarding Fire at AB Mazeikiu Nafta
'', Mažeikių Nafta company website
although some spot fires were still being put out the next day.
Blaze at Mazeikiu Nafta threatens PKN Orlen deal
', The Baltic Times, (18 October 2006).
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 Latvia ( or ; lv, Latvija ; ltg, Latveja; liv, Leţmō), officially the Republic of Latvia ( lv, Latvijas Republika, links=no, ltg, Latvejas Republika, links=no, liv, Leţmō Vabāmō, links=no), is a country in the Baltic region of ...
n border. There were no casualties among personnel. Damages incurred are estimated around 38 million Euro, as well as around 30 million in lost revenue due to production losses.
PKN Orlen buy out of Lithuania's Mazeikiu due on December 15
', The Baltic Times (18 November 2006)
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). In the end, the blaze did not stop the takeover 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. The vice-leader of the
Russian Duma The State Duma (russian: Госуда́рственная ду́ма, r=Gosudárstvennaja dúma), commonly abbreviated in Russian as Gosduma ( rus, Госду́ма), is the lower house of the Federal Assembly of Russia, while the upper house ...
,
Konstantin Kosachev Konstantin Iosifovich Kosachev (russian: Константин Иосифович Косачев; born 17 September 1962) is a Soviet and Russian politician and former diplomat. He is a senator at the Federation Council (Russian parliament's upper ...
, 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.


References


External links




Orlen Lietuva Company Website
{{DEFAULTSORT:Orlen Lietuva Oil companies of Lithuania Companies listed on Nasdaq Vilnius Oil refineries in Lithuania Buildings and structures built in the Soviet Union Oil companies of the Soviet Union Non-renewable resource companies established in 1964 1964 establishments in Lithuania Companies based in Mažeikiai Oil refineries in the Soviet Union