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Lithuania's Mazeikiu nafta unlikely to be sold to Russian co.

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VILNIUS, November 29 (RIA Novosti) - Lithuania's government approved Wednesday a new wording of the country's national energy strategy, which bans economic entities from states supplying Lithuania with energy resources from managing national energy enterprises.

This means that the Mazeikiu nafta refinery cannot be sold to a Russian company, the government's press service said.

Oil shipments to the Baltic States' only refinery via Druzhba-1, a branch of the vast Druzhba (Friendship) pipeline system, were suspended in July following an accident in western Russia, and have not been resumed.

PKN Orlen, the largest oil refiner in Poland and central Europe, signed an agreement in May to buy 53.7% in Mazeikiu from Yukos for $1.49 billion, and the Lithuanian government offered another 30.66% for $852 million. PKN Orlen is eventually seeking 100% ownership in the Lithuanian company.

The deal is to be completed by March 2007 but the Polish company suspended the procedures after a fire broke out at the refinery in mid-October, causing millions of dollars worth of damage and jeopardizing the deal.

Russia's continued suspension of crude supplies to the Mazeikiu nafta refinery was seen by analysts as a punitive measure following the Lithuanian government's decision to sell the refinery to PKN Orlen, rejecting Russian bids. Poland is currently pressuring Russia to sign an international energy treaty entailing supply guarantees.

The Lithuanian energy strategy, to be approved yet by the country's parliament, also envisions commissioning by 2015 of a new nuclear power plant, connecting by 2012 the national power transmission network with Scandinavian and Polish grids, and building a regional gas storage facility and a liquefied natural gas terminal.

The document also says that the share of energy resources each country exports to Lithuania cannot exceed 30% of the Baltic state's energy balance.

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