LITHUANIA: Presidents of Lithuania, Poland, Estonia and Latvia say need for joint approach to energy

Energy was on the agenda in the Lithuanian capital of Vilnius on Monday (November 6), as the presidents of Lithuania, Poland, Latvia and Estonia met to hold talks. The four signed an energy declaration, emphasising the need for joint energy projects, and cooperation between their countries on the issue. Also discussed was Lithuania's Mazeikiu Nafta refinery, and its proposed purchase by Polish oil company PKN Orlen. European competition authorities have been evaluating the purchase of Mazeikiu, controlled by stricken Russian oil major YUKOS, since the deal was announced in May. Polish President Lech Kaczynski and PKN Orlen's Chief Executive Igor Chalupec who were visiting the Baltic state, said on Monday they remained fully committed to seeing the deal through -- despite several setbacks that have reduced the refinery's output and undermined profits. "There were top managers of PKN Orlen on the Polish delegation. We are determined. I suppose the contract which is of high importance both for Lithuania and Poland will be finalised in the near future," Kaczynski said at a news conference following round table talks. Lithuanian Prime Minister Gediminas Kirkilas earlier told Reuters he was encouraged by the support shown by the Polish President and PKN chief, after a morning meeting with both men. PKN won an international bidding competition in May to buy control of Mazeikiu -- one of the biggest outlets of Russian oil to Europe -- in a deal worth around USD2.6 billion. But Mazeikiu's Russian oil pipeline supply was cut off in July and a major fire in mid-October reduced the plant's refining capacity to around 50 percent of normal, arousing speculation that PKN might invoke an opt-out clause contained in the purchase agreement. Before the fire Mazeikiu was refining 20,000 tonnes of crude a day. Immediately after the fire, which destroyed a vacuum distillation unit, it was refining 12,000 tonnes daily. Now refining 15,000 tonnes, it will run at reduced capacity until the destroyed unit is replaced in eight months' time. Kaczynski commented on the possibility of his country being involved in the building of a nuclear power plant in Lithuania. "I cannot make promises at this stage that the Polish government would take part in building a nuclear rector, because this is not an issue for the president to decide, but we would consider that seriously. The decision should be taken within a few months. We are not interested in buying electricity, but in becoming a co-owner of the plant together with the three Baltic states," he said. The presidents also discussed transport projects, such as the Via Baltica and Rail Baltica, which are to cross their territories.

ITN Source | November 7, 2006

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