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Clarification regarding information released by Ventspils Freeport Authority

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Clarification regarding information released by Ventspils Freeport Authority

july 11, 2016 / News

""Ventspils nafta" termināls" Ltd. (VNT) would like to draw attention to the fact that the information publicly announced by Ventspils Freeport Authority about VNT’s activities related to the conclusion of the contract on a lease of the land plot for installation of the Vapour Recovery Unit (VRU) and the invitation for VNT to participate in the development of the Freeport Regulations does not reflect the real situation.

On granting the lease rights to VNT for the land plot in the area of jetties for the installation of the permanent VRU

VNT re-confirms that on 22nd February 2016 VNT and JSC Ventbunkers submitted a joint application for the direct lease of the land plot in the area of jetties intended for the installation of the permanent VRU to Ventspils Freeport Authority for the review. In its first reply, Ventspils Freeport Authority informed VNT that the matter will be discussed during one of the upcoming meetings of Ventspils Freeport Board. However, on 12th April 2016 VNT received a letter from Ventspils Freeport Authority stating that due to the arrest of JSC Ventbunkers shares in 2008 it cannot decide upon the joint application until this matter is settled in the legal manner.

Taking this into account, VNT addressed the criminal court board of Riga Regional Court on 26th April 2016 and received its resolution on 10th May 2016. The resolution stated that Ventspils Freeport Authority has the right and authority to make any decisions related to the land plot in its possession and leased to JSC Ventbunkers. 

On 13th May 2016, VNT submitted the document issued by the criminal court board of Riga Regional Court to Ventspils Freeport Authority, although Ventspils Freeport Authority should have requested and received this court resolution itself if doubting its rights or authority to decide upon the land plot possessed by Ventspils Freeport which would have saved significant time in the process.

On amendments to Ventspils Freeport Regulations 

For years, Ventspils City Council and Ventspils Freeport Authority have been continuously emphasizing to VNT the need to install a VRU. However, during all those years, neither Ventspils City Council nor Ventspils Freeport Authority have shown any urgency to amend the Freeport regulations and include new requirements as to the VRU installation. Sudden urgency occurred only after VNT had publicly announced its firm plans to build the permanent VRU by November 2017. 

In February 2016 Ventspils Freeport Authority invited Ventspils Freeport operators, also VNT, to participate in a meeting as to the plan of Ventspils Freeport to develop a smell reduction program considering the problem of smells during the loading of petroleum products. During the initial meeting on 4th February 2016, Ventspils Freeport Authority assured the port terminals that they will be updated on progress related to this subject. As a follow-up, one week later, VNT was visited by the consultancy firm, appointed by Ventspils Freeport Authority, to gather further information for its research work. VNT emphasizes it has not received further invitations to any other meetings on this subject and was not aware of three meetings taking place.

Since February 2016, despite several inquiries by VNT as to the progress of the development of the program, regretfully no information regarding this subject has been shared by Ventspils Freeport Authority with VNT. Once again VNT would like to highlight that on 27th May 2016 Ventspils Freeport Authority proposed to Ventspils City Council to make amendments to the Ventspils binding regulations No 9 “Ventspils Freeport Regulations”, issued on 2nd March 2012, without approaching VNT during the development of the regulations, even though for already six months VNT has been trying to receive answers in connection with its efforts to install a temporary and permanent VRU.  

After the amendments to the Freeport Regulations were passed by Ventspils Freeport Authority on 27th May 2016, VNT asked Ventspils City Council on 8th June 2016 to share the content of the document with VNT. On 30th June 2016 Ventspils City Council informed VNT that the draft amendments are still under the review, pending confirmation, and the that regulations will be available on the municipal webpage as soon as the final wording is developed. 

At the moment VNT, representing the biggest transhipment company for oil products in the Baltics, contributing 70 % of all liquid cargo in Ventspils port and 40 % in Latvia, still is neither aware of any new requirements nor the foreseen transition period to comply with new requirements. Moreover, VNT remains unaware when this information will be available. This situation not only hampers the schedule of the VRU project, but also has a negative impact on stability of performing business in the Ventspils port.