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On Wednesday, ORLEN Lietuva is starting a new round of negotiations with Lietuvos Gelezinkeliai. It is another attempt initiated by the Mazeikiai company to reach a settlement in the complicated and long-lasting dispute. The aim of ORLEN Lietuva is to settle the issue of tariffs, other old disputes as well as bilateral court claims so the business cooperation with the carrier was fair and according to the market conditions.

Negotiations resumed after the meeting

ORLEN Lietuva is returning to the negotiations and looking forward to reaching a settlement with Lietuvos Gelezinkeliai. Relaunch of the attempt to amicably conclude the dispute was agreed upon during the recent meeting attended by PKN ORLEN CEO Wojciech Jasiński, Polish governmental officials and Prime Minister Algirdas Butkevicius.

ORLEN Lietuva representatives are confident that their partners in the negotiations will work with full commitment and attention to detail in order to elaborate clear conditions for the final agreement.

After Renge railway section was disassembled by Lietuvos Gelezinkeliai, ORLEN Lietuva is forced to use a longer route for transportation of its products. Since that time, the two companies have been dealing with a conflict related to rail transportation tariffs with regard to implementation of the European regulations on use of railway infrastructure. It is important to note that ORLEN Lietuva pays higher tariffs than the tariffs paid by other customers despite the fact that ORLEN Lietuva transports the biggest volumes of oil products.

One month for the negotiations

The new round of the negotiations has been scheduled for one month. According to the arrangements of the meeting with Prime Minister Butkevicius, the parties expect to agree on the details of rail transportation tariffs as well as the cost of additional services which is to be based on market conditions, also to deal with the issue on bilateral financial claims.

Therefore, ORLEN Lietuva hereby confirms its previous formal and public statements regarding its position. Representatives of the Company also assure that, following the Company's standard policy, they will not comment on the negotiations while such are in progress and will restrain from any speculations regarding their nature. However, they will immediately communicate about any agreement if such is reached.

The negotiations between the two parties were already held a few months ago; however, the parties failed to reach an agreement back then. One of the main reasons for the failure was the fact that Lietuvos Gelezinkeliai consistently refused to provide ORLEN Lietuva with the information on the cost of the so-called additional services related to transportation of ORLEN Lietuva products. This made it impossible for ORLEN Lietuva to assess the whole scope of the proposal from Lietuvos Gelezinkeliai.  Representatives of ORLEN Lietuva hope that this will not be the case of the upcoming negotiations.

Renge railway section was the shortest (19 km) way to Latvia. It enabled ORLEN Lietuva to export its products and provided it with the potential of cooperation with Latvian carriers. Since Lietuvos Gelezinkeliai dismantled the section, the products need to be transported along a longer (approximately 150 km) route.

Aim – fair tariffs

ORLEN Lietuva is the biggest Lithuanian company, exporter and tax payer. Since 2006, PKN ORLEN has spent nearly USD 4 billion on the acquisition and further investments in the Mazeikiai refinery.

Therefore, PKN ORLEN, as the only shareholder, undertook all accessible measures to restructure the Company and implement a strategy that enables ORLEN Lietuva to adjust to the market conditions: maximize the production and, thus, the economic effect whenever the market is favorable.  On the other hand, introduced solutions could help to minimize it, when the market is low.

At the same time, the competitiveness of ORLEN Lietuva is permanently dependent on the cost of transportation of its products. Therefore, ORLEN Lietuva aims to have fair and equal product transportation tariffs just like those applied to its competitors in Lithuania.