Orlen Lietuva
Orlen Lietuva is a subsidiary of the Polish PKN Orlen and owns the Mažeikiai oil refinery as well as the oil-processing plant in Lithuania, the only oil refinery in the Baltic States.
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. 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 since July 2006, ostensibly for repairs. Crude oil is now being supplied by the Būtingė oil terminal. The Mažeikiai refinery is the only oil refinery in the Baltic States.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.Construction of the pipelines in Lithuania started in 1966, with the first crude oil being put through them in 1968. 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 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 buoy which lies 7 km offshore.
Privatization
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.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, Kazakhstan and Poland showed interest in acquiring the refinery, whose majority stakeholder was now Yukos International, a Yukos syndicate. 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. 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".
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. 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.