Draft financing agreed for Azoty/Lotos Gdansk petchem complex

29 November 2013 15:59  [Source: ICIS news]

LONDON (ICIS)--Polish state-owned infrastructure financing vehicle Polish Investments for Development (PIR), Grupa Azoty and Grupa Lotos have agreed a preliminary financing package for a planned multi-billion-euro petrochemical complex in Gdansk, a PIR source said on Friday.

The three-way agreement would see PIR contribute a maximum of zloty (Zl) 750m ($242.7, €178.6m) to the investment, while Grupa Azoty would arrange the remainder of the required financing and Grupa Lotos would provide land and feedstock, he added.

On 19 November, a Grupa Azoty source disclosed that Grupa Azoty and Grupa Lotos – both state-controlled firms – have opted to pursue a petrochemical complex centred around an ethylene cracker rather than an aromatics extraction plan.

The final decision on whether to go ahead with the investment will be taken next year, the companies said.

Chemical industry analysts have predicted that ministers will want to give the green light to the investment because they are minded to reduce Poland's annual chemical trade deficit of around €8bn ($10.8bn) and further utilise the benefits of a completed modernisation of Grupa Lotos' refinery.

The initial plan for the complex proposed that it should be entirely constructed alongside Grupa Lotos' refinery in Gdansk, on the Baltic coast of northern Poland, but the project feasibility is to examine whether it could be split between the Gdansk site and Tarnow, the southern Polish town that is home to Grupa Azoty, Poland's largest chemical group.

The investment proposal envisages Grupa Azoty largely buying the output of complex's petrochemical units, which could eventually amount to 1m tonnes/year.

($1 = €0.74, $1 = Zl 3.09, €1 = Zl 4.20)

By: Will Conroy
+44 20 8652 3214

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