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Monday 23.07.2018 | Name days: Magda, Magone, Mērija

Lukoil subsidiary causing losses and «traffic jams» on the Latvian Railway

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Baltic news, News from Latvia, BNN-NEWS.COM

Currently there are hundreds of railcar tankers «traffic jams» caused by oil trade company Litasco actions.

A subsidiary of the Russian oil company Lukoil Litasco’s decision not to accept the delivery of over 120.000 metric tons (mt) of its fuel oil stored in Ventbunkers (VBU) is seriously intervening with VBU and the Latvian Railway (LDZ) activities.

Ventbunkers reservoirs have currently reached full capacity, however additional 1 700 railcar tankers with more than 100.000 thousand mt of Litasco oil product are already in the territory of Latvia. Given that the tankers cannot discharge the fuel oil, they are placed throughout all Latvian railway stations. LDZ called an extraordinary meeting on January 6, 2011 to carry out immediate measures to ensure future operations of the rail system. Currently Rezekne and Daugavpils border stations are full and the situation is characterised as critical. Dr. Rudolf Meroni, the Chairman of the Supervisory Boards of AS Ventbunkers pointed out that the company makes every effort to resolve the situation as soon as possible.

Litasco delayed the tanker Celtic Sea entering Ventspils port on December 25, 2010, in order to load their fuel oil from VBU reservoirs, resulting in catastrophic damages to LDZ and Ventbunkers, as the latter cannot discharge the oil stored and receive the new shipments currently waiting on the rails. In additon to that Ventbunkers has to pay more than 100.000 dollars per day due to demurrage. As of January 12, the losses already exceeded 1.1 million lats.

There are ongoing speculations Litasco is intentionally creating the fuss in order to make Ventbunkers extend the service contract expired last year, however Litasco still owes Ventbunkers 20 million euro for services rendered in 2010. The value of the products not being shipped could exceed 100 million dollars in total.

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  1. Stulbais Anglis says:

    This article didn’t make much sense to me initially but after reading it through a number of times I think you are trying to say the following. Maybe you could update the article?

    Lukoil subsidiary crippling Ventbunkers and causing congestion on Latvian Railways

    Litasco’s actions have resulted in hundreds of laden rail-car tankers clogging Latvian railways

    Litasco is a subsidiary of the Russian oil company Lukoil. Their decision not to accept the delivery of over 120,000 metric tons (mt) of their own fuel oil stored in Ventbunkers’ (VBU) reservoirs is seriously disrupting VBU and Latvian Railway (LDZ) activities.

    Ventbunkers reservoirs are full and an additional 1,700 rail-car tankers containing more than 100,000 thousand mt of Litasco’s oil products remain parked up in Latvia. As the tankers have nowhere to discharge their fuel oil they have been distributed throughout the Latvian rail network. LDZ called an extraordinary meeting on January 6, 2011 to plan immediate measures to assure the future operation of the rail system. Currently Rezekne and Daugavpils border stations are full and the situation is classified as critical.

    The tanker “Celtic Sea” was due to enter Ventspils port on 25th December, 2010 but has been delayed because she cannot be discharged due to the reservoirs being full. This is causing serious financial hardship to Ventbunkers who are having to pay US$100,000 per day demurrage to the shipping company. As of 12th January, VBU’s losses already exceed Ls.1.1 million.

    There is speculation that Litasco is intentionally causing this disruption in order to force Ventbunkers into extending their service contract that expired last year. However Litasco still owes Ventbunkers €20 million for services rendered in 2010.

    The total value of Litasco’s products currently held in Latvia may exceed US$100 million.


    Incidentally, I removed the references to traffic jams as I think they are rather misleading. After all, the tankers have not been parked on the main line between Rīga and Daugavpils. I don't think you can describe a line of tankers in a siding as a traffic jam even if it does disrupt storage allocations.

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