Corrected: Orlen invests $1.6bn in Mazeikiu Nafta in 2007-12

04 June 2007 10:54  [Source: ICIS news]

Correction: In the ICIS news story headlined "Orlen invests $1.6m in Mazeikiu Nafta in 2007-12" published on 4 June 2007, please read the headline as "Orlen invests $1.6bn in Mazeikiu Nafta in 2007-12..." instead of "...invests $1.6m..." Also in the first paragraph please read ...invest $1.6bn (€1.2bn)... instead of  ...invest $1.6m (€1.2m).... A corrected story follows.

This follows a correction from the company.

LONDON (ICIS news)--PKN Orlen will invest $1.6bn (€1.2bn) in its Lithuanian subsidiary Mazeikiu Nafta in 2007-2012, including a new propylene splitter, the Polish company said on Monday.

It said its value creation program would take place in three phases.

In the first $300m phase, production capacity would be restored after a fire on 12 October last year. The company would also restore crude supplies via pipeline.

During the second $550m phase, the company said it would improve operational efficiency across all Mazeikiu business segments.

This would include expanding its retail network in the Baltic and establishing the company’s independent seaborne trading activities.

The third $750m phase would involve value growth through a modernisation and new investment program, Orlen said.

It added that preparation for this had started and during 2007, was expected to involve detailed front-end engineering and planning. The implementation would be continued in 2008 with the majority of works completed by the end of 2011.

The new investment program would be realised mainly through increasing the refinery conversion ratio through a hydrocracker, vacuum flasher and a propylene splitter.

Orlen said Mazeikiu Nafta’s earnings before interest, tax, depreciation and amortisation (EBITDA) level would increase $650m in 2012 compared with 2007 under the constant macro scenario.

PKN Orlen completed the purchase of 53.7% of Lithuania’s Mazeikiu Nafta oil refinery from Russia’s Yukos in December, despite speculation that it would not buy the business after a fire at the site.

($1 = €0.74)

By: Hilde Ovrebekk
+44 20 8652 3214

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