Lithuanian state-owned rail freight operator, LTG Cargo, recently started transporting petroleum products between Bugeniai, in Luthiania, and Valga, in Estonia. The initiative is another reflection of how operators in the Baltic are looking to diversify their operations due to loss of cargo to and from Russia and Belarus.
The launch of operations was preceded by a test run towards the end of February. However, the origins of this international expansion can be found even earlier, when LTG Cargo applied for carrier safety certificates in Latvia and Estonia. The sole customer of the service will be Orlen Lietuva, the Lithuanian subsidiary of Orlen, a large Polish oil refiner. Orlen Lietuva in fact operates a refinery in Mažeikiai, near Bugeniai.
LTG Cargo and Orlen Lietuva were already cooperating when it came to rail freight services within the Lithuanian borders. The thought of taking this partnership to an cross-Baltic level was first brought up in 2018, justified by the fact that around 20 per cent of the oil produced in Mažeikiai goes north towards the rest of the Baltics.
How are Baltic operators adapting?
Expanding across the Baltic states is not only in LTG Cargo’s plans as the issues regarding Russia and Belarus touch all of them. For example, Latvian national rail freight company LDZ Cargo recently won public tenders in Estonia. On the other hand, their Estonian counterpart Operail decided to embrace full privatisation to enable international expansion and remain financially viable.
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