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PKN says refineries oil supply secure despite Saudi attacks

September 19/2019

MOSCOW (MRC) -- Despite attacks on Saudi Arabian oil facilities, Polands PKN Orlen says oil supplies to its refineries are secure due to its diversified sourcing and it does not expect near-term fuel prices in Poland will rise, reported Hydrocarbonprocessing.

State-run PKN, whose Plock refinery crude used to be sourced almost exclusively from Russia, started to diversify its buying a few years ago aiming to reduce its reliance on Russian supply.

That approach helped PKN keep Plock running when deliveries of Russian oil via the Druzhba pipeline were suspended in April due to contamination.

PKN Orlen has a long-term deal with Saudi Aramco on deliveries of 300,000 tonnes of crude per month.

It was also supposed to receive up to 800,000 tonnes of crude oil from Saudi Aramco Products Trading company in six spot deliveries between May and October.

"We are in constant contact with Saudi Aramco. Supplies to the Orlen Group refineries are secured," the PKN press office said in an-email sent to Reuters on Monday evening, noting it receives oil from various sources.

"The next oil transport will be delivered from Nigeria at the end of September. We will soon inform you about further deliveries from other directions," PKN said.

The Plock refinery receives around 1.4 million tonnes of crude per month, 700,000 tonnes of which comes from non-Russian sources, including 300,000 tonnes from Saudi Arabia. In total, PKNs refineries - in Poland, the Czech Republic and Lithuania - receive 30% of their crude oil from outside Russia.

"We are constantly monitoring the situation on the oil markets, also in the context of recent events in Saudi Arabia. However, it is too early to clearly state to what extent they will translate into the oil market in the coming months," PKN said.

"The current information does not constitute a risk of changes in the structure of fuel supply on the Polish market and should not affect prices in the near future".

Saudi Arabia is the worlds biggest oil exporter and the attack on state-owned producer Saudi Aramcos crude processing facilities at Abqaiq and Khurais has cut output by 5.7 million barrels per day. The company has not given a timeline for the resumption of full output.

As MRC wrote previously, in H1 September 2019, Honeywell announced that PKN ORLEN had licensed the UOP MaxEne process, which can increase production of ethylene and aromatics and improve the flexibility of gasoline production. The project, for the PKN ORLEN facility in Plock, Poland, currently is in the basic engineering stage. Honeywell UOP, a leading provider of technologies for the oil and gas industry, first commercialized the UOP MaxEne process in 2013. The process enables refiners and petrochemical producers to direct molecules within the naphtha feed to the processes that deliver the greatest value and improve yields of fuels and petrochemicals.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polyprolypele (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,255,800 tonnes in the first seven months of 2019, up by 9% year on year. Shipments of all PE grades increased. At the same time, the estimated PP consumption in the Russian market was 796,120 tonnes in January-July 2019, up by 11% year on year. Shipments of PP block copolymer and homopolymer PP increased.

PKN ORLEN would be the first refining and petrochemicals company in Europe to use the Honeywell UOP MaxEne technology for molecule management of a naphtha stream to produce high-quality products including olefins, aromatics and gasoline.
Author:Margaret Volkova
Tags:PP, PE, benzene, crude and gaz condensate, PP block copolymer, homopolymer PP, propylene, ethylene, petrochemistry, PKN Orlen, Poland, Russia, Saudi Arabia.
Category:General News
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