Daniel Obajtek's flagship investment is back. Orlen resumed work on the construction of Olefin III
The consortium, which includes Polimex Mostostal, Nafetremont-Naftobudowa (company from the Polimex Mostostal Group) and KTI Poland signed annexes to contracts with Orlen increasing the consortium remuneration by the total maximum additional remuneration in the amount of PLN 446.3 million net-said Polimex Mostostal in a message.
Read also: “The best of the bad decisions”. President of Orlen with cuts in the investment
Annexes have been concluded for the contract for the performance of multi -branch works When expanding the Olefin installation – also served. It is an installation, the construction of which was interrupted by the new management of Orlen, headed by Ireneusz Fąfara.
The contract with the consortium with Polimex Mostostal was at the forefront in July 2023 during the term of office of Daniel Obajtek and then the value of works at PLN 3.9 billion was determined, of which Polimex himself was to get 89 percent. The interruption of the investment after the replacement of Daniel Obajtek to Ireneusz Fąfara was explained by the fact that the costs, which were originally to be PLN 8.3 billion, and later updated to PLN 13.5 billion, increased to PLN 25 billion, and “detailed analyzes showed that The actual amount could reach up to PLN 51 billion” – said Orlen. The current report presented by Orlen showed that the investment outlays incurred on the project amounted to PLN 12.6 billion at the end of the third quarter of 2024.
Extended deadline
According to Polimex, the total share of its group (Polimex Mostostal and NaftoRont-Naftobudowa) in additional salary will be about 94 percent. The subject of annexes is also, among others Extending the deadline for the implementation of the contracts until December 31, 2027.
We would like to remind you that for the implementation of the largest contract in the history of the Polimex group, this was 45 months from the date of signing the contracts, i.e. the robots were to be finished by April 2027.
“The additional remuneration referred to above is a maximum estimated remuneration, which will be settled as well as possible after performing additional works and is not indexed based on the indicator of construction and assembly production prices published by the Central Statistical Office”-he was said.
The scope of work on signing the contract included, among others execution of about 24 thousand tons of steel structures, 7.5 thousand tons of above -ground pipelines and 60 km of underground networks installations. Since the deadline was extended to the end of 2027, and the value of the contract was raised by PLN 446 million, it would indicate that Orlen intends to continue the investment. We sent questions to Orlen about the reasons for the decision.
New chemistry instead of Olefin III
In November last year Orlen said that the Olefina III project “will certainly not be implemented in the current shape.” It was reported that optimization was being considered and this path was apparently taken.
According to the new assumptions of the project called Nowa Chemistry, as part of the ORLEN2035 strategy, the installation of a new steam accident for the production of Olefin with the target production power of ethylene 740,000 is to be created. tons per year and 340 thousand tons of propylene, which is the same as as part of the Olefiny III project. The new complex would be put into use not earlier than in 2030 with the ability to generate the EBITDA result (operational result increased by depreciation) at the level about PLN 1 billion a year – we read on the company's websites.
In the background of the information there is recent castling on the board of Orlen. At the end of August, a member of the board of Orlen Artur Osuchowski for sustainable development and energy transformation and vice president of financial affairs Magdalena Bartoś was dismissed.
Author: Jacek Frączyk, Business Insider Polska editor
