30-12-2019

Mažeikiai refinery regains railway connection with Latvia

Lithuanian Railways, acting in consultation with ORLEN Lietuva from ORLEN Group, has rebuilt a 19 kilometre long railway section between Mažeikiai and Renge, thus restoring the shortest rail route from the Mažeikiai refinery to Latvia, dismantled in 2008.

PKN ORLEN had called for the rail line to be rebuilt for over a decade, but to no avail. The matter was given priority by Daniel Obajtek, President of the PKN ORLEN Management Board, who during his first months in office negotiated and signed with the Lithuanian government and Lithuanian Railways a memorandum to restore rail traffic on the Mažeikiai-Renge line.

“We have built strong relationships with our Lithuanian partners, enabling us to successfuly deliver our business objectives in the region. Our projects are set to become increasingly profitable, securing a revenue source for us and for the Lithuanian government,” said Daniel Obajtek, President of the PKN ORLEN Management Board. “The Mažeikiai refinery is a guarantee of energy security in Lithuania and whole region. I would like to thank Polish government and Polish President Andrzej Duda for their support and commitment that underpinned the successful reconstruction of a rail link that was non-existent for over a decade.”

“We have delivered on the promise we made in spring, working in partnership with the transport ministers of Poland, Lithuania and Latvia – the Renge railway section has been rebuilt. These 19 kilometres are more important to us than any other 19 kilometres of tracks. They are the foundation of a lasting partnership and flourishing business relationships with PKN ORLEN and Poland,” said Mantas Bartuška, CEO of Lithuanian Railways.

After the line soon becomes operational, petroleum products will be delivered to the Latvian and Estonian markets via a shorter route instead of the more difficult and costly route used over the past ten years, which was over 150 kilometres longer.

The disassembly of the tracks to Renge became a symbol of the difficult relations between Poland and Lithuania. It also had an adverse impact on the operational efficiency and performance of PKN ORLEN’s Lithuanian refinery. The situation has improved significantly in recent years, and dialogue has been established between PKN ORLEN and its key Lithuanian partners. Thanks to a business-like and partnership approach, a number of old disagreements have also been settled.

The collaboration between PKN ORLEN and Lithuanian Railways was stepped up on August 14th 2018, when the chiefs of the two companies, Daniel Obajtek and Mantas Bartuška, signed a memorandum of understanding to expand cooperation. It was also the time when the project to rebuild the Mažeikiai-Renge railway line, now completed, was initiated. Moreover, on January 20th 2019 an agreement which not only guarantees that the current freight volumes to the Baltic States will be maintained, but also contributes to significantly increasing the volumes of products brought into Poland was extended.

Owned by ORLEN Lietuva, the Mažeikiai plant is the only refinery in the Baltic States, and it has recently become part of PKN ORLEN’s integrated petrochemical chain. ORLEN Lietuva is set to remain an important member of the Group, ensuring supplies of petroleum products to Lithuania, Latvia, Estonia, and Poland.