Orlen Lietuva, AB

Incidents

Druzhba pipeline Lithuanian branch shutdown

On 29 July 2006 Russia shut down oil export to Mažeikių oil refinery in Lithuania after an oil spill on the Druzhba pipeline system occurred in Russia's Bryansk oblast, 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 Orlen in an effort to avoid the refinery and infrastructure being bought out by Russian interests. 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, although some spot fires were still being put out the next day. 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 Latvian 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. 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.