MOSCOW (MRC) - Poland's largest refiner PKN Orlen said it will sell some Lotos assets to companies including Saudi Aramco, reported Reuters.
Saudi Aramco will buy a 30% stake in Lotos Asfalt, one of the largest manufacturers of bitumen in Europe which also owns the Lotos oil refinery in Gdansk, in a deal including a fixed payment of 1.15 billion zlotys and variable elements. It will also acquire 100% stakes in two other units.
Orlen has also signed a deal with Aramco for oil supplies of 200,000-337,000 barrels per day, adding more purchases to those agreed earlier. Deliveries under the new contract will start this year, PKN's chief executive told journalists.
Poland's Unimot and Hungary's Rossi Biofuel will also purchase some Lotos assets, PKN Orlen added.
Critics say selling Lotos's assets would result in letting more international competitors into Poland, but Orlen and the government argue that taking over the smaller rival will improve company's market position, its bargaining power and investment capacities.
"This new company...is a great opportunity for Poland...to successfully face the challenges we are facing today. The challenges related to the energy transformation, to global changes when it comes to new sources of energy and fuels," Poland's state assets minister told journalists.
"I am convinced that Orlen will be strengthened by these Lotos assets, but also strengthened by cooperation with Saudi Aramco," Jacek Sasin added.
PKN Orlen announced plans to buy Lotos in 2018, but had to meet conditions set by the European Commission. It agreed to sell some Lotos assets to address competition concerns.
As MRC informed earlier, in May 2016, PKN ORLEN signed a contract with Saudi Aramco for the supply of ca. 200 thousand tonnes of crude oil monthly to its refineries. The contract was effective since May 1st to December 31st 2016, with an option of automatic renewal for successive years. The oil is processed by all PKN ORLEN's refineries in Poland, the Czech Republic and Lithuania. This was the first direct long-term contract with a supplier from the Gulf region in the history of the Polish company.
We remind that Orlen Unipetrol (part of PKN Orlen), a major Czech producer of petrochemical products, will expand the capacity of its steam cracker in Litvinov (Czech Republic) by installing a new furnace. The new cracker will be built by Technip Energies in Zaluzi, the largest chemical plant in the Czech Republic, and is due to be commissioned in 2022. Orlen is investing over 700 mln Czech crown (CZK) in the project.
Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,265,290 tonnes in the first eleven months of 2021, up by 14% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 1,363,850 tonnes in January-November, 2021, up by 25% year on year. Supply of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased, whereas supply of injection moulding PP random copolymers decreased significantly.
PKN Orlen is a leading player on the fuels and energy markets, and the largest company in Central and Eastern Europe, listed in prestigious global rankings such as Fortune Global 500, Platts TOP250 and Thompson Reuters TOP100. The ORLEN Group operates in 6 home markets – Poland, the Czech Republic, Germany, Lithuania, Slovakia and Canada.