The developer and operator of petrochemical and liquefied natural gas (LNG) terminals Klaipėdos Nafta (KN) and ORLEN Lietuva have entered into a collaborative agreement for diesel loading operations at KN’s leased Marijampolė Oil Terminal, which infrastructure consists of 2 tanks with a total capacity of almost 7,000 cubic metres.
Darius Šilenskis, the CEO of KN, said that the need for additional capacity at the Marijampolė Oil Terminal was dictated by the increased volumes of oil products transported towards western destinations.
“The supply chain for oil products has changed completely since Russia started the war in Ukraine,” he noted. “Some products are transported from Lithuania to Ukraine, but due to the different track gauges, conventional rail transport cannot be used. We provide our customers with fuel-loading services for rail wagons and ISO containers. However, this method of fuel delivery is limited due to the different track gauges and the busy nature of the entire logistics chain.”
For these reasons, a significant part of the fuel from Lithuania to Ukraine is transported by tanker trucks. The Klaipėda Oil Terminal’s tanker yard is not able to offer such a service due to its high occupancy rate and contractual obligations with existing customers.
As a result, customers find it more attractive to import fuel to Ukraine by tanker truck. However, due to high occupancy rates and contractual obligations with existing customers, the KN Klaipėda Oil Terminal tanker yard cannot offer this service.
Considering these circumstances and the needs of ORLEN Lietuva, it was decided to offer oil product handling services at the Marijampolė Oil Terminal, from which tanker cargoes will be able to reach Ukraine more efficiently, not only because of the decreased congestion in the logistics chain but also due to the Marijampolė terminal’s strategic location, resulting in shorter distances to be covered.
As part of the cooperation agreement, KN has assumed the role of the commercial operator at the Marijampolė Oil Terminal, setting up an excise warehouse at the terminal. The main user of the terminal will be ORLEN Lietuva, which will handle the loading of diesel from rail to tankers.
“ORLEN Lietuva’s product exports to Ukraine are recovering rapidly. In the first quarter of 2023, 93 per cent more products were sold to the Ukrainian market than in the first quarter of 2022, after the outbreak of the war,” said Michal Rudnicki, CEO of ORLEN Lietuva. “We aim to increase sales volumes in this direction and create more favourable loading conditions for our Ukrainian customers. To this end, we have concluded a cooperation agreement with KN on the use of the Marijampolė Oil Terminal. The availability of an alternative loading point will help to meet the diesel demand of Ukrainian customers more efficiently. This product is needed not only for diesel-powered light and heavy transport but also for generators used in the event of power cuts”.
