Poland’s state oil and gas company Orlen has halted the construction of a billion dollar petrochemical refinery near Płock, blaming skyrocketing costs as the reason. The project called Olefin III was launched with a lot of noise by the previous Polish conservative government and would have established the Płock site as the largest such complex in Europe.
“The original cost of the project was estimated at PLN 8.3 billion,” an 11 December Orlen press release reads. “In 2023, the then management tripled the projected expenditure to PLN 25 billion, while simultaneously scaling back the scope of the project by excluding the most promising advanced chemicals. The actual cost of the project, including the construction of critical infrastructure needed for the plant’s operation, would have climbed to as much as PLN 51 billion.” Ten billion Polish zloty (PLN) equals EUR 2.3 billion.
Spotlight on Polish government spending
The decision puts the spotlight on government spending under the conservative PiS party during the time it ruled the country from 2015 to 2023, and of the then leadership of Daniel Obajtek appointed by PiS. In the 11-December-statement, the oil and gas company under its new leadership writes: “A comprehensive review of the costs and terms of constructing the Olefins III complex, conducted for the first time since the project’s inception, revealed that the project was not financially viable.” However, Orlen still credits Obajtek as the driving force for the revision of the Olefins III plan.
Orlen’s New Chemicals project
Orlen announced it will use the foundation of the Olefins III expansion for its Nowa Chemia (New Chemicals) project. Plans call for factories to boost Orlen’s production of ethylene oxide, glycols, styrene and C4 fraction, as well as new monomer production. The new factories are to take over the work done by the Olefins II installations in Płock from 2030. | © 2024 Marcel Burger, nordicreporter.com. Featured photo: the Olefins site in Płock (Press photo: Orlen)