* PKN's Lithuanian unit suffered $94 milion loss in 2013

* Production at 200,000 bpd refinery reduced to 60 pct

* Low margins, logistic costs weighs on profitability

* Refiner's shutdown is one on the options considered

VILNIUS, May 5 (Reuters) - PKN Orlen's PKN.WA Lithuanian refinery expects its production to remain curtailed and losses to deepen significantly in 2014 as its exports markets shrink, raising the possibility of shutting down production for good.

The 200,000 barrels per day capacity Orlen Lietuva refinery is the second-biggest in the Polish oil group, and the top exporter in the Baltic state.

It reported a net loss of $94 million in 2013 as European refining margins fell on rising supply from the U.S. and Asian producers, and cut production to 60 percent of its total capacity in the first quarter.

"Losses can be significantly larger than last year," Ireneusz Fafara, general director of ORLEN Lietuva, told Reuters on the sidelines of a news conference where he said he expected the refinery's output to remain restricted for the rest of this year.

Asked whether PKN was considering shutting down the loss-making refinery, Fafara said: "Yes, of course... The option of stopping production is also under consideration."

He said the refinery has significantly cut exports of oil products by tankers, and now sells most of its production in the Baltic states and Ukraine, and some in Finland.

Orlen Lietuva has said its profitability was hurt by logistic costs of transporting oil products by railway to export terminal Klaipedos Nafta KNF1L.VL , more than 100 kilometres away from the refinery.

The refinery was asking the Lithuanian government to build and finance a $150 million worth pipeline from the inland plant to the port of Klaipeda to make exports of diesel and petrol via sea profitable again, Fafara told reporters.

PKN said it had spent nearly $4 billion on acquiring the refinery and related investments since 2006.

(Reporting by Andrius Sytas, writing by Nerijus Adomaitis, editing by William Hardy)

((nerijus.adomaitis@thomsonreuters.com)(+47 9027 6699)(Reuters Messaging: nerijus.adomaitis.thomsonreuters@reuters.net))

Keywords: PKN ORLEN LITHUANIA/