Russia’s Energy and Industry Minister Viktor Khristenko
Photo: Dmitry Dukhanin
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Russia Won’t Fix Oil Pipeline to Lithuania
Russia won’t repair the section of Druzhba oil pipeline running to Lithuania, Russia’s Energy and Industry Minister Viktor Khristenko said.
Russia has two options – either to continue supplying crude to Lithuania by sea, which costs more than by an oil pipeline, or to re-lay all Druzhba pipeline. For Russia, the first choice is more preferable, as “this situation’s maximum is the loss of $1 to $2 in business of some companies, which I don’t know,” Khristenko said, pointing out Russia’s refusal to repair Druzhba won’t affect energy security of Lithuania.
Russia halted crude oil deliveries to Lithuania via Druzhba pipeline about a year ago, once its Federal Environmental, Technological and Nuclear Oversight Service (Rostekhnadzor) found more than 8,000 defects in Druzhba’s two sections. The pipeline monopoly of the country, Transneft said then it would repair Druzhba if it regarded that action economically reasonable.
Lithuania hosts the Baltic States' sole refinery - Mazeikiu Nafta, which previous owners had been Yukos and Lithuanian government. In 2006, however, Poland’s PKN Orlen prevailed over other bidders, including the Russians, and grabbed the asset.
Mazeikiu Nafta posted the Q1 net loss of $39.09 million also because of deliveries' disruption. Lithuanian President Valdus Adamkus even threatened to block the talks on new agreement of Russia and the European Union if Russia doesn’t resume Druzhba supplies.
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