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Poland's Orlen scales down and renames Olefins petrochemical task

Orlen, Poland's biggest gas and oil company, scaled back its plans for the Olefins petrochemical job on Wednesday, calling the financial investment misguided and stating it anticipates to reduce its approximated cost by as much as a third.

The freshly specified structure called New Chemistry was estimated to cost 34 billion zlotys ($ 8.40 billion) compared to a series of 45 billion zlotys to 51 billion zlotys for the earlier job, Orlen stated in a declaration.

The production of olefins, a chemical substance after which the original project was named, would not start until 2030 at the earliest, it added.

The announcement ends months of debate on the future of the delayed financial investment job as the global petrochemical market comes to grips with the biggest crisis in years amidst low prices and overcapacity.

Orlen began developing the plant in 2021 and had actually invested 12.6 billion zlotys since completion of September. It also took numerous writedowns due to delays.

State Assets Minister Jakub Jaworowski said last month that a state audit approximated the company had actually lost about 5 billion zlotys on the project.

Orlen said it would hold talks with professionals in the coming months to lay out a new schedule for the job, and would release the schedule and a brand-new budget by the end of September 2025.

Olefins was imagined as the biggest petrochemical task in Europe in years, providing plastics ranging from bags and bottles to pipes and containers.

Conclusion was initially prepared for 2024, but was postponed until a minimum of 2030. The job's expenses more than tripled due to bad planning, the company stated last month.

Orlen employed specialists EY and Bain to make suggestions on the project's future, and in November chose it would not finish the task in the shape prepared by the previous management.

The state-controlled business's management has actually been gradually changed given that a change in government in elections in 2015.

(source: Reuters)