Orlen resigns from the Olefina III project. The failure was going to be billions

wbijamszpile.pl 1 year ago

The decision to halt the Olefina III task is 1 of the largest investment stops in the past of Orlen. The board of directors, led by Ireneusz Fąfara, made this decision to avoid losses estimated at PLN 15 billion. The key argument was a drastic excess of the first investment costs and many irregularities revealed during the task analysis.

The Olefina III project, originally valued at PLN 8.3 billion, was to consume up to PLN 51 billion over time. Already in 2023, costs increased more than 3 times to PLN 25 billion, although the scope of the investment was limited, eliminating the most future chemicals.

The fresh management of Orlen indicates that the analyses carried out in erstwhile years did not take account of real marketplace and technological conditions, which made the task economically unprofitable.

New Chemistry alternatively of Olefin III

Despite the decision to halt the construction of Olefina III, Orlen plans to usage the existing infrastructure. It will be utilized for the fresh Chemistry project. This investment, planned for around 2030, is to introduce modern monomer production technologies and increase the sales capacity of the company in the ethylene oxide, glycol and styrene segment. The fresh Chemistry will replace the installations operating under Olefin II, which will let the long-term optimisation of the operation of the Płock plant.

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Doubts surrounding the decision of the erstwhile board

The Olefina III investment was called the largest venture in the past of Orlen and 1 of the largest chemical projects in Europe for 2 decades. It was to improve the company's profitability by PLN 1.5 billion per year. However, the current president of Orlen criticized the actions of his predecessors, calling them “gigantomania”. Comparisons to Edward Gierek's era item the deficiency of real economical justification and task management errors.