October 1, 2008 / 3:31 PM / 11 years ago

PKN Orlen presses Lithuania for Klaipedos control

WARSAW, Oct 1 (Reuters) - Polish oil company PKN Orlen PKNA.WA may cut investments and jobs at its Mazeikiu refinery unless the Lithuanian government agrees to give up control over Klaipedos oil (KNF1L.VL) terminal, its chief executive said.

PKN has said it wants to build a $100 million pipeline from Mazeikiu to Klaipedos to cut transport costs, but needs to have a hand in setting loading tariffs at the state-owned terminal.

“We are in serious talks with Lithuanian government about gaining access to and operational control over Klaipedos terminal,” PKN Chief Executive Jacek Krawiec told reporters in parliament.

“If the agreement is not reached, and the signals we get from Vilinius are very optimistic, then we would probably have to limit investment and move faster with job cuts (at Mazeikiu),” he added.

PKN Orlen, which bought Mazeikiu at the end of 2006, has suffered a blow after crude supplies to the refiner via the Druzhba pipeline were choked off.

This forced it to ship crude via its offshore terminal in the Baltic Sea, raising costs.

Mazeikiu also exports 60 percent of its output via sea routes. (Reporting by Piotr Bujnicki; Writing by Piotr Skolimowski; Editing by Quentin Bryar)

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