05-02-2020

PKN ORLEN to optimise oil refining

As previously announced, PKN ORLEN is expanding its production assets to enable more efficient use of feedstocks. To that end, a new visbreaking unit, of key importance to the Company’s refinery in PÅ‚ock, will be built to increase the yield of light products: gasoline and diesel oil. The project worth approximately PLN 1bn is planned to start commercial operation by the end of 2022. It is expected to add up to PLN 415m to PKN ORLEN’s annual EBITDA. Once all investment projects currently underway at the refinery are completed after 2022, annual EBITDA is estimated to grow by over PLN 600m in total.

We are optimising production in line with our stated strategy. We are closely monitoring the macro environment. It is the reason why we are growing our core business lines – oil refining, petrochemicals, and power generation. The key to success is to accelerate investment processes so that we are able to start earning profits as soon as possible. The visbreaker at the PÅ‚ock refinery is a case in point. It will help us effectively respond to the growing demand for high-margin products, while strengthening our position on the competitive international market,” notes Daniel Obajtek, President of the PKN ORLEN Management Board.

In the visbreaking unit, scheduled to begin commercial operation at the PÅ‚ock plant by the end of 2022, vacuum residue, which has so far been used to make heavy fuel oils and asphalt, will be processed into high-margin products: gasoline and diesel oil. This will help the refinery to achieve higher conversion and increase fuel yields per barrel of oil by several percentage points.

The unit will be built under a visbreaking licence from Shell/CB&I NEDERLAND B.V. by a consortium of KTI Poland S.A. (consortium leader) and IDS-BUD S.A. (consortium member). PKN ORLEN has signed a turnkey contract for the design, procurement, construction, installation, commissioning and start-up of the unit. The unit is to begin commercial operation by the end of 2022.

Visbreaking is a proven technology already used by the ORLEN Group’s Czech and Lithuanian refineries. Visbreaking units require the lowest capital cost of any other available vacuum residue conversion technology.

Another project in progress at the PÅ‚ock plant is an upgrade of the hydrocracking unit. Once it is completed, the annual diesel oil output will increase by 100,000 tonnes. Also, a diesel hydrotreater is being modernised with a view to increasing diesel oil production by 150,000 tonnes. These two projects, planned to be completed in late 2020, are expected to add PLN 200m to total annual EBITDA.