No. 30/2023 | 29-06-2023 | 17:38
Development of the petrochemical segment within ORLEN Capital Group
PKN ORLEN (“Company”) herby informs that on 29 June 2023 the Company’s Supervisory Board and Management Board have taken the necessary decisions to facilitate the conclusion of the Settlement (“Settlement”) modifying the Engineering, Procurement, Construction and Commissioning (EPCC) Contract for the Olefin III Complex with Hyundai Engineering Poland Spółka z o. o. Técnicas Reunidas S.A. Spółka jawna, based in Płock, the contractor for the Olefin III Complex (“Investment”) in the ISBL scope, as well as the conclusion of contracts for the implementation of the basic infrastructure (OSBL) required for the launch of the Investment and the preparation of infrastructure for subsequent stages of petrochemical development.
The need to enter into a Settlement with the Invesment's contractors arises from the revision of the investment assumptions, primarily influenced by the war in Ukraine and the resulting sanctions and thus the increasing cost of materials, disrupted supply chains and limited availability of execution resources. In addition, within the Olefins III Project the core infrastructure at the Production Plant in Plock is being modernized, while also being prepared for future development projects, including decarbonisation projects. The potential for these projects is increasing due to recent market changes and tightening of regulations. PKN ORLEN, through the increased scale of production of petrochemicals and chemicals, aims to leverage its market potential not only in Poland, but also across the entire region, taking advantage of its reliability, convenient location and the scale and availability of its assets. Based on current estimates, the total cost of construction of the Olefins III Complex will amount to ca. PLN 25 bn, and its completion is scheduled for the first half of 2027. The realization of the Investment is expected to contribute over PLN 1 bn annually to the EBITDA of the ORLEN Group
The construction of the Olefins III Complex is of utmost importance and is a necessary step towards transforming the Company's existing refining and petrochemical assets in Plock and Gdansk. It will enable the integration of petrochemical processes within the ORLEN Group and unlock operational synergies, including those with Rafineria Gdańska Sp. z o.o. The investment will support the continued development of the ORLEN Group through organic and inorganic activities. The implementation of these activities would strengthen the Company's position as one of the leading players in the transformation of refining and petrochemical assets in Europe.
See also regulatory announcements: no 27/2021 as of 24 May 2021, no 26/2021 as of 24 May 2021 and no 69/2018 as of 12 June 2018.