Baltic, Cargo, Energy, Energy Market, EU – Baltic States, Lithuania, Oil, Railways, Transport

LG Deputy CEO Albertas Simenas says that the talks went into a deadlock after Orlen Lietuva, the Lithuanian subsidiary of Poland's oil group Orlen, put forward its new position.

In his words, the state railway company cannot agree to the amount of discount, which is three to four times higher than that in the spring. Therefore, it is likely that the companies will again fail to reach a deal and court disputes between them will continue.

Prime Minister Algirdas Butkevicius says that the government will not accept Orlen's demands if that may plunge the railway operator into losses.

"These demands must be based on calculations. If they are such as would cause the railway company to operate at a loss, then nobody will take such decisions," he said.

Simenas did not disclose the exact amount of discounts sought by Orlen Lietuva for 2016-2020, after a contract signed between the companies in 2009 expires, but said that it would be tens of mlns of euros and "more".

"The negotiating positions are clear now and have a clear expression in the value of discount. That suggests that if the railway company agrees to that request, then the energy project will be going through without any problem. In other words, it is clear what financial benefit Poland has to get via Orlen in order to sign the energy project,"said Simenas.

Butkevicius has admitted earlier that a deal between LG and Orlen would make it simpler for Lithuania to speak with Poland about energy projects.

Energy Minister Rokas Masiulis also admitted last week that the issue of railway tariffs, raised by Polish officials, was having an impact on energy projects.

Rimvydas Stilinis, chairman of the management board at Lithuania's power transmission system operator Litgrid, said that this might stall the synchronization talks.

Simenas said that the LG management had not yet made a final decision on whether or not to discontinue the negotiations with Orlen.