WARSAW, May 28 (Reuters) - Poland's biggest oil refiner PKN Orlen
The Polish firm has already said that if it cannot stem the losses it may have to close its Lithuanian business, called Orlen Lietuva, which has been dogged by problems since its acquisition eight years ago.
"Our meeting with Orlen Lietuva on Tuesday took less than 15 minutes," said Vilius Nikitinas, director of the legal and personnel department at Lithuanian railways.
"They asked us to lower our rates by a third," he told Reuters. "We said we cannot do it. They stood up and walked away."
Marek Podstawa, management board member at the state-controlled PKN, confirmed that the company had not been able to reach agreement with the railway operator.
"Negotiations came to no avail," Podstawa told a parliamentary committee. "We are considering any scenario when it comes to the future of the Lithuanian company, including its liquidation," he said, repeating earlier warnings that PKN may sell up.
Orlen Lietuva operates ex-Soviet Lithuania's only oil refinery - an important strategic asset in a region where pro-Western governments are trying to reduce their dependence on Russian energy.
The Lithuanian business is the Polish firm's second-biggest unit by capacity, but has struggled to show profitability since PKN took control of the refinery in 2006, paying $2.6 billion in a transaction in which it beat potential bidders from Russia.
Up to that point, the refinery was supplied with Russian oil via a pipeline through Belarus. After PKN took over, the pipeline stopped operating.
Since then, the refinery has been forced to rely on more costly deliveries of oil by sea, reducing its margins.
The cost of shipping the refined products by rail to the Klaipedos Nafta export terminal
PKN expects Orlen Lietuva's losses to deepen significantly in 2014.
(Reporting by Adrian Krajewski and Andrius Sytas; Additional reporting by Nerijus Adomaitis in Vilnius and Pawel Sobczak in Warsaw; editing by Keiron Henderson)
((adrian.krajewski@thomsonreuters.com)(+48 22 653 97 09)(Reuters Messaging: adrian.krajewski.thomsonreuters.com@reuters.net))
Keywords: POLAND PKN ORLEN




















