Orlen Lietuva (former Mažeikių Nafta) is a subsidiary of the Polish PKN Orlen and owns the Mažeikiai

oil refinery An oil refinery or petroleum refinery is an industrial processes, industrial process Factory, plant where petroleum (crude oil) is transformed and refining, refined into products such as gasoline (petrol), diesel fuel, Bitumen, asphalt base, ...

as well as the oil-processing plant in

Lithuania Lithuania, officially the Republic of Lithuania, 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, bordered by Latvia to the north, Belarus to the east and south, P ...

, the only oil refinery in the

Baltic States The Baltic states or the Baltic countries is a geopolitical term encompassing Estonia, Latvia, and Lithuania. All three countries are members of NATO, the European Union, the Eurozone, and the OECD. The three sovereign states on the eastern co ...

Refinery

The Mažeikiai refinery, located near the town of

Mažeikiai Mažeikiai (; Samogitian: ''Mažeikē''; ; ) is a city in northwestern Lithuania, on the Venta River. It has a population of around 32,000, making it the eighth largest city in Lithuania and eighteenth largest city in the Baltic States. Th ...

, 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 chemical mixture found in geological formations, consisting mainly of hydrocarbons. The term ''petroleum'' refers both to naturally occurring u ...

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 (, ), also 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 the world. It began operation in 1964 and remains in oper ...

, however the relevant branch of this system has been closed in Russian territory
Orlen i Możejki - finał przejęcia
',

Gazeta Wyborcza (; ''The Electoral Gazette'' in English) is a Polish nationwide daily newspaper based in Warsaw, Poland. It was launched on 8 May 1989 on the basis of the Polish Round Table Agreement and as a press organ of the Solidarity (Polish trade union), t ...

, (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 (see below).
Lithuania oil refinery blaze hits output
',

Reuters Reuters ( ) is a news agency owned by Thomson Reuters. It employs around 2,500 journalists and 600 photojournalists in about 200 locations worldwide writing in 16 languages. Reuters is one of the largest news agencies in the world. The agency ...

, newsdesk (12 October 2006) The Mažeikiai refinery is the only oil refinery in the

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 (, also known by several alternative names) is a city in northern Lithuania. Famous for its reconstructed Biržai Castle manor, the whole region is renowned for its many traditional-recipe beer breweries. Name The exact origin of th ...

and another near Joniškis, crude oil pipelines to the

Refinery and Būtingė Terminal, a crude oil pipeline leading to

Ventspils Ventspils () 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 is situated on the Venta River and ...

, and another products pipeline supplying diesel fuel to the same location. Construction of the 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 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 the countries of Denmark, Estonia, Finland, Germany, Latvia, Lithuania, Poland, Russia, Sweden, and the North European Plain, North and Central European Plain regions. It is the ...

on the Lithuanian coastline near the town of Būtingė, north of

Palanga Palanga (; ; ) is a resort town, resort city in western Lithuania, on the shore of the Baltic Sea. Palanga is the busiest and the largest summer resort in Lithuania and has sand, sandy beaches (18 km, 11 miles long and up to 300 metres, 10 ...

. 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 Environmental monitoring is the processes and activities that are done to characterize and describe the state of the environment. It is used in the preparation of environmental impact assessments, and in many circumstances in which human activit ...

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" (, ) was an oil and gas company based in Moscow, Russia. Yukos was acquired from the Russian government by Russian oligarch Mikhail Khodorkovsky's Bank Menatep during the controversial "loans for shares" auctions of ...

. 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. Several potential buyers from

Russia Russia, or the Russian Federation, is a country spanning Eastern Europe and North Asia. It is the list of countries and dependencies by area, largest country in the world, and extends across Time in Russia, eleven time zones, sharing Borders ...

Kazakhstan Kazakhstan, officially the Republic of Kazakhstan, is a landlocked country primarily in Central Asia, with a European Kazakhstan, small portion in Eastern Europe. It borders Russia to the Kazakhstan–Russia border, north and west, China to th ...

and

Poland Poland, officially the Republic of Poland, is a country in Central Europe. It extends from the Baltic Sea in the north to the Sudetes and Carpathian Mountains in the south, bordered by Lithuania and Russia to the northeast, Belarus and Ukrai ...

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 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 (national defense in American English), is the security and Defence (military), defence of a sovereign state, including its Citizenship, citizens, economy, and institutions, which is regarded as a duty of ...

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'' (''NYT'') is an American daily newspaper based in New York City. ''The New York Times'' covers domestic, national, and international news, and publishes opinion pieces, investigative reports, and reviews. As one of ...

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 union, supranational political union, political and economic union of Member state of the European Union, member states that are Geography of the European Union, located primarily in Europe. The u ...

'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 US$1.492 billion paid by PKN Orlen to Yukos International, and US$851.8 million to the Lithuanian Government.

Russian hostilities

Druzhba pipeline Lithuanian branch shutdown

On 29 July 2006 Russia shut down oil export to Mažeikių oil refinery in

after an oil spill on the

system occurred in Russia's

Bryansk oblast Bryansk Oblast (), also known as Bryanshchina (, ), is a federal subject of Russia (an oblast). Its administrative center is the city of Bryansk. As of the 2021 Census, its population was 1,169,161. Geography Bryansk Oblast lies in weste ...

, 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 in response to Lithuania selling the Mažeikių refinery to Polish company PKN OrlenRussian oil supplies to Lithuania cut off
, by Vladimis Socor, Eurasia Daily Monitor Volume 3, Issue 150 (3 August 2006) in an effort to avoid the refinery and infrastructure being bought out by Russian interests.

', Financial Times, (24 November 2006) Russian crude oil is now being transshipped via the Būtingė oil terminal.

Fire

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 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 Latvia, officially the Republic of Latvia, is a country in the Baltic region of Northern Europe. It is one of the three Baltic states, along with Estonia to the north and Lithuania to the south. It borders Russia to the east and Belarus to t ...

n border. There were no casualties among personnel. Damages incurred are estimated at 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 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. 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.

References

External links

New Installations Started their Trip from Klaipeda to Mazeikiai

AB Mažeikių Nafta Modernized Installations in Record TimeOrlen 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 Orlen