The Olefins III project envisages building a new steam cracker with 740,000 t/y capacity while at the same time potentially shutting part of the existing olefins complex, which was built more than 40 years ago, and removing about 340,000 t/y of capacity. As well as the new cracker, the complex will include five new derivative units, including a large ethylene oxide and glycol plant.

Overall, PKN Orlen said its current petrochemical output of more than 5 million t/y will expand by over 1 million t/y, which will lift its share of the European petrochemical market from 5% to 6.4% once the project is commissioned, also consolidating its position in central Europe.

The company also believes that thanks to its effective project preparation and contracting strategy, it has outpaced the competition by more than 12 months with regard to expanding olefins capacity, adding that it will be the first to address the shortage of base petrochemical products on the market.

“With this project on-stream, PKN Orlen will join the top petrochemical producers in the European market. It will also secure its competitiveness in the long run and increase its resistance to unfavorable mega-trends in the fuel market,” said Daniel Obajtek, CEO and president of PKN Orlen’s management board, adding that the project fits with Orlen’s merger with Lotos, which will supply petroleum products for petrochemical production.

PKN Orlen is currently in the process of merging with Polish oil and oil products company Grupa Lotos and the Polish Oil and Gas Company (PGNiG). The takeover was approved by the European Commission last July, and earlier this month Orlen said it had confirmed the structure of the intended merger with Poland’s Ministry of State Assets.

The supervisory board’s approval also opens the way to sign an engineering, procurement and construction (EPC) contract with preferred bidders, namely Hyundai Engineering and Tecnicas Reunidas. “The olefins complex expansion project is a great opportunity for us to increase our presence in Europe as a world-class EPC contractor,” said Hyundai Engineering CEO Chang Hag Kim.

The project is scheduled for completion in the first quarter of 2024 and production is expected to be launched for early 2025. Orlen said it will add about 1 billion Polish zloty to its annual EBITDA.

Author: Elaine Burridge, Freelance Journalist