Polish Briefing 17 February, 2020 9:00 am   
Editorial staff

Polish Briefing: Rail reconstruction will increase the profitability of Mazeikiai Refinery

What goes on in Poland on the 17th of February.

Rails reconstruction will increase the profitability of Mazeikiai Refinery. Orlen has further plans

The reconstruction of the 19 km section of rails from Mazeikiai Refinery to Latvia is just the beginning. PKN Orlen has plans for further investments in this plant.

The ceremony of launching the supply of petroleum products from the Mazeikiai Refinery to Latvia took place on February 15 in Mazeikiai. It was possible thanks to the reconstruction of the railway connection from the facility to Renge.

Lithuania dismantled the 19-kilometer track to Renge in 2008. The improvement of Polish-Lithuanian relations a decade later enabled its reconstruction. The connection is important for the profitability of the Możejki Refinery, because it shortens the route of supply of petroleum products to the Latvian market, reducing transport costs incurred by the Polish Orlen Lietuva, the owner of the facility and the daughter company of PKN Orlen. The Minister of Transport and Communications of Lithuania Jaroslav Narkevič talked about the restoration of trust between his country and Poland, which enabled the reconstruction of the connection to Renge. – This decision will have long-term positive economic effects – he assured. He expressed hope for the continuation of Polish-Lithuanian rail cooperation on the EU project Rail Baltica.

The Minister of Transport of Latvia, Tālis Linkaits, reminded that the section to Renge seems short, but it is of strategic importance because it will connect “our countries, businesses and people”. He expressed hope for the reconstruction of the Mazeikiu-Riga passenger connection and further cooperation on Rail Baltica. CEO of PKN Orlen Daniel Obajtek talked about the importance of rebuilding the connection for the profitability of Możejki Refinery. – The refinery must do business, but it guarantees security in this part of the world – he reminded. – The decision to buy a refinery in 2006 was very hard and brave. It was undertaken by President Lech Kaczyński, a friend of Lithuania.

The Minister of Transport of Poland Andrzej Adamczyk sent a letter to the participants of the ceremony read by the head of Orlen Lietuva Michał Rudnicki. He emphasized the role of expanding infrastructure and energy connections of Poland and Lithuania from the point of view of EU policy as well as geopolitics. The development of connections is to increase the region’s security.

The President of Orlen recalled the history of the problems at the Mazeikiu refinery: cutting off oil supplies from Russia and dismantling the railway section to Renge via the Lithuanian Railways. – Thank God this period is gone – he said. – The investment started in August 2018 and we are receiving it in February 2020. This is a quick process that will facilitate the next strategic decisions that are to make this refinery have economic parameters, to develop further, and its revenues to support the Lithuanian state more strongly – he added. He denied the thesis that shortening supplies due to track reconstruction will reduce the revenues of the Lithuanian Railways, because it will increase the load on their traction on other sections.

PKN Orlen plans to develop the functionalities of the Możejki Refinery through new functionalities, including small petrochemicals and an in-depth oil processing installation. In mid-year, the company is to select the contractor for this project, which is to be completed in 2023.