GRI indicators:

Downstream in 2019


units ORLEN
Poland Czech
Maximum processing capacity million t 35.2 16.3 8.7 10.2
Utilization of processing capacity % 96 99 90 93
White product yields % 80 83 81 74
Utilization of Olefin installation capacity % 79 78 80
Utilization of PTA installation capacity % 95 95


units ORLEN
Poland Czech
TOTAL thousand t 32,740 17,620 6,608 8,512
Refinery, including: thousand t 27,584 14,243 4,847 8,494
fuels thousand t 19,205 8,932 3,925 6,348
heavy fractions thousand t 4,784 2,228 675 1,881
other refinery products thousand t 3,595 3,083 247 265
Petrochemicals, including: thousand t 5,156 3,377 1,761 18
olefins thousand t 1,022 836 168 18
polyolefins thousand t 519 0 519
benzene thousand t 424 210 214
plastics thousand t 343 252 91
fertilizers thousand t 1,030 863 167
PTA thousand t 647 647
other petrochemical products thousand t 1,171 569 602


units ORLEN
Poland Czech
Total length of used pipelines, including: km 3,720 1,888 1,741 91
length of used raw materials pipelines km 1,662 930 641 91
length of used product pipelines km 2,058 958 1,100

Power Industry

units Poland1 Czech Republic2 Lithuania
Electric power installed MWe 1,542 106 160
Heating power installed MWt 3,742 1,399 1,040
Boiler’s efficiency % 93.0 90.3 91.7
Boiler’s availability % 84.8 70.4 72.3
1) Installed thermal and electrical capacity refers to the CHP plant in Płock and the CCGT plant in Włocławek. Availability and efficiency of boilers at the CHP plant in Płock 2) Installed thermal and electrical capacity as well as availability and efficiency of boilers at the Litvinov Power Plant.

Main production assets (refinery and petrochemical) of the ORLEN Group

Production assets of the ORLEN Group and main competitors in the Central and Easter Europe / production capacity [million t]

Infografika-Orlen-2020-100 (1) Infografika-Orlen-2020-100 (1)

Source: Own preparation.


  • The total production capacities of the ORLEN Group refineries are 35.2 million tonnes.
  • The PKN ORLEN refinery in Płock is one of the most advanced integrated production facilities in Central and Eastern Europe, with a production capacity of 16.3 million tonnes/year. In petrochemicals, the key unit (Olefins) has a maximum production capacity of about 700 thousand tonnes of ethylene and about 380 thousand tonnes of propylene. Monomers manufactured at PKN ORLEN are used as feedstock for the polymer units at Basell Orlen Polyolefins and the PVC unit at ANWIL. PKN ORLEN also operates a modern PX/PTA complex with an annual capacity of around 690 thousand tonnes of terephthalic acid.
  • The other Polish refineries, operating as the ORLEN Południe Group in Trzebinia and Jedlicze, manufacture bio-components, base oils, heating oils and hydrotreated paraffins as well as regenerate spent oils.
  • The ORLEN Lietuva refinery in Mazeikai has a production capacity of 10.2 million tonnes/year and is the only such facility in the Baltic States (Lithuania, Latvia and Estonia).
  • The Unipetrol Group operates refineries in Kralupy and Litvinov, with a combined production capacity of 8.7 million tonnes/year. The Unipetrol Group also owns petrochemical assets with combined production capacities of approximately 600 thousand tonnes/year of polymers, including 320 thousand tonnes of polyethyleneand approximately 280 thousand tonnes of polypropylene. Construction of a new Polyethylene III unit, with a capacity of approximately 270 thousand tonnes/year, is under way. Once completed, the unit will allow Unipetrol to increase the use of the Olefins installation and further integrate the petrochemical and refining operations.
  • The Włocławek-based Anwil is the only manufacturer of polyvinyl chloride (PVC) in Poland and one of the major manufacturers of fertilizers and sodium hydroxide in the country. The annual production capacities are around 1.0 million tonnes/year of nitrogen fertilizers, approximately 0.4 million tonnes/year of PVC and granulates, and approximately 0.2 million tonnes/year of sodium hydroxide. Thanks to the planned construction of the third production installation of nitrogen fertilizers the production capacity of Anwil after 2021 will increase to approximately 1.5 million tonnes/year.
  • Basell ORLEN Polyolefins in Płock operates facilities with a total production capacity of 900 thousand tonnes (420 thousand tonnes of polyethylene and 480 thousand tonnes of polypropylene). Products are marketed both in Poland and in foreign markets.


The largest competitors of the ORLEN Group are:

  • LOTOS Group of Gdańsk – Poland’s second largest refinery.
  • Mitteldeutschland Refinery in Leuna/Spergau, located in south-eastern Germany, about 150 km from the Polish-German border, the country’s most advanced refinery.
  • PCK Refinery in Schwedt, located north-east of Berlin, about 20 km from the Polish-German border.
  • Slovnaft refinery, an integrated refining and petrochemical group, with a leading position in the Slovak Republic, located near Bratislava.
  • Mozyr refinery, a leading refinery in Belarus, located close to the Ukrainian border.

Key operational data

Volume of crude processed by the ORLEN Group in 2019 of 33.9 million tonnes, an increase of 1.5% (y/y), including:

  • Poland, an increase of 2.2% (y/y) as a result of lower range of maintenance shutdowns (y/y) of HOG and PX/PTA units as well as lack of maintenance shoutdown of Olefins unit from year 2018.
  • the Czech Republic, an increase of 4.0% (y/y) due to higher availability of the production installations in comparison with year 2018 (cyclical maintenance shutdowns at the Kralupy refinery and petrochemical units in Litvínov).
  • Lithuania, a decrease of (1.8)% mainly due to a spring maintenance shutdown of the refinery and FCC unit.
Infografika-Orlen-2020-120 Infografika-Orlen-2020-120

Source: Own preparation.

Key energy assets

The ORLEN Group is a significant producer of electricity and heat, used in large part to satisfy the Group’s own production needs. It is also one of the largest consumers of gas in Poland and an active participant in the process of gas market liberalisation.

The ORLEN Group currently owns power generation assets in three countries. In Poland, they are located in Płock, Włocławek, Jedlicze and Trzebinia; in the Czech Republic – in Litvinov, Spolana, Kolin and Pardubice; and in Lithuania – in Mazeikiai.

Energy assets and their technical parameters in the ORLEN Group

Infografika-Orlen-2019 (S)-31 Infografika-Orlen-2019 (S)-31

Source: Own preparation.

CHP plants

  • In terms of thermal capacity, PKN ORLEN’s high-efficiency combined heat and power plant in Płock is the largest industrial plant of this kind in Poland and one of the largest in Europe. It is the main supplier of steam heat, heating water and electricity to the Group’s production units in Płock and to external customers, including the city of Płock. Following the launch of a new TG7 turbine generator set and shutdown of the TG1 unit (which is to be upgraded) in 2019, the total installed power generation capacity of the CHP plant stands currently at 358.9 MW. The upgraded TG1 turbine generator set is to be put into operation in September 2021, bringing the plant’s total power generation capacity to 428 MW. Boilers of the CHP plant are fired with heavy fuel oil derived from crude oil distillationand with natural gas.
  • The ORLEN Południe Group’s CHP plant in Trzebinia fully satisfies the Trzebinia plant’s demand for steam heat and heating water, and partly its demand for electricity. The CHP plant is fuelled with natural gas and fine coal, a new gas-fired heat generation unit, covering around 50% of heat demand, having been brought on stream in 2019.
  • The ORLEN Południe Group’s CHP plant in Jedlicze, fired mainly with fine coal, is the Jedlicze plant’s main supplier of heat in the form of process steam. Other fuels used at Jedlicze include natural gas, fuel oil and C4 fraction.
  • The Anwil CHP Plant is the primary source of heat in the form of medium pressure process steam and, at the same time, the peak-load and reserve source of heat for the Włocławek chemical complex. For process purposes, Anwil relies mostly on low pressure process steam from the Włocławek CCGT unit owned by PKN ORLEN.
  • The Unipetrol Group’s CHP plant in Litvínov uses mainly lignite, fully meeting the Litvínov plant’s heat demand and partially satisfying its electricity demand. Design work is now under way for a new CHP Plant project based on high-efficiency gas-fired cogeneration, which will ultimately replace the existing CHP plant. The new unit is to be launched in the second half of this decade.
  • The CHP plant in Spolana is currently being upgraded in order to replace its existing coal-fired boiler house with a new heat source. In 2019, a start-up procedure for the new heat generation units (gas-fired boilers) was commenced, and final work is now under way to put the new heat source into operation.
  • The Paramo CHP plant comprises two production plants, in Kolin and in Pardubice, both fuelled with natural gas.
  • The ORLEN Lietuva CHP plant is a source of process steam used in production processes, while ensuring stability of the power system. The plant is fired with natural gas, refinery gases, C4 fraction, and heavy fuel oil.
ccgt ccgt


  • CCGT Włocławek – since April 2019, after the gas turbine failure was removed, the unit has operated normally, supplying electricity and process steam to the Anwil complex. In the three quarters of 2019, the CCGT plant was an active participant of the electricity market, cooperating closely with PSE. Its relatively high installed capacity and significant flexibility made it possible for the plant to provide ancillary services to PSE, contributing to the power system’s stability. In 2019, the CCGT plant produced over 2.6 TWh of electricity and supplied 1.1 PJ of heat in the form of process steam to Anwil.
  • CCGT Płock – operated normally with warranty support and service agreements in place. Under the main service agreement (LTSA), the gas turbine was subject to the first planned overhaul in September, involving replacement of burners, modifications of the compressor blade fastening according to the supplier’s recommendations, and general inspections as per the agreement. As a producer of heat and power in cogeneration, the CCGT plant covered the shortage of these utilities at the Płock Production Plant, while remaining an active participant of the electricity market and providing ancillary power reserve services to the transmission system operator PSE. In 2019, the unit generated 3.9 TWh of electricity and 3.2 PJ of steam supplied to the Płock Production Plant network.

Surplus electricity from the new CCGT assets is sold both on the wholesale energy market and to end customers.

Capacity market

In 2019 the Main Capacity Market Auction for 2024 was held, with PKN ORLEN securing a 357 MW capacity agreement for the CCGT unit in Włocławek. PKN ORLEN had also signed capacity agreements for the delivery period 2021–2023 under Main Auctions held in 2018. The CCGT plant in Płock, as a new facility, was awarded a five-year 389 MW capacity agreement (for 2021–2025), while the CCGT plant in Włocławek, as an existing unit, was awarded three one-year 351 MW capacity agreements for 2021–2023.

ORLEN Group’s Photovoltaics (PV) Programme

Development of renewable energy sources (RES) is an element of PKN ORLEN’s energy strategy. The end of 2019 saw the launch of the Group’s Photovoltaics Programme, which will involve the set-up and coordination of PV projects across the ORLEN Group. In stage one of the PV Programme, the Group selected locations satisfying the relevant technical criteria for potential installation of photovoltaic units. Complete documentation necessary to secure a building permit and sign an agreement with a contractor of PV farms will subsequently be prepared for these locations. In the second stage of the Programme, the ORLEN Group will examine other properties and land where photovoltaic farms could potentially be located.

Electric mobility

In accordance with the ORLEN Group’s updated Strategy for 2019–2022, electricity as an alternative vehicle fuel will be one of the key game-changing trends in the fuel market until 2025 and beyond. To meet that challenge, 39 charging stations had been launched at PKN ORLEN’s urban, motorway and trunk road service stations by 2019, with further ones undergoing commissioning procedures. They can charge up to two vehicles at a time through 50 kW or 100 kW DC points, and one vehicle with up to 43 kW through the AC point. This essentially means that our charging stations are equipped with connectors supporting all electric vehicles now available on the European market. By 2021, PKN ORLEN intends to have 150 fast EV chargers deployed within its service station chain. In addition to developing its charging infrastructure, PKN ORLEN also decided to partially electrify its vehicle fleet. In 2019, nine new Nissan Leaf electric cars were made available to the Company’s employees and have been in regular use ever since.

In 2019 an IT system was implemented to support the management of PKN ORLEN’s charging station network, including an operator portal, as well as a website and mobile app for users. All the existing charging stations are being connected to the online system, which is being tested prior to market launch. Ultimately, its full implementation will enable motorists to make payments through the mobile application.

In 2019, PKN ORLEN also implemented, in partnership with a business accelerator operating under the Electro Scale UP programme, the first innovative project proposed by the Enelion start-up. The project, which involved three AC charging stations with an innovative system of dynamically alternating current voltages, was successfully implemented in the underground car park of a Warsaw office building.

Offshore Wind Power project

Through its special purpose vehicle Baltic Power, PKN ORLEN holds a licence (i.e. a permit to construct and use artificial islands, structures and equipment within Polish sea areas) to build offshore wind farms in the Baltic Sea with a capacity up to 1,200 MW, complete with technical equipment, measurement instrumentation and maintenance infrastructure. The Offshore Wind Power project is consistent with PKN ORLEN’s strategy and is in line with long-term plans for development of Poland’s energy sector. It will support generation of zero-emission energy which can be used for the Company’s own consumption, processed, stored, or sold.

In 2019, deliverables of the technical consultancy contract, which consisted in a preliminary technical concept for the construction of an offshore wind farm, were handed over to the Company. It will provide the basis for subsequent work under the project, including the signing of an engineering design contract, which will cover, among other tasks, the preparation of a preliminary engineering design and building permit submission for the Offshore Wind Power project.

In terms of preliminary geotechnical work, a plan of geological operations for seabed drilling within the licence area was approved by the Polish Ministry of Environment, and a contract for preliminary geotechnical surveys for the offshore wind farm was signed. In 2019, the first stage of work at sea was finished, and analysis of the collected data is currently in progress.

In January 2019, Baltic Power secured grid connection conditions for the offshore wind farm. Having thoroughly reviewed these conditions and the draft grid connection agreement, the company began to negotiate their individual provisions with PSE. Work currently under way within Baltic Power’s licence area involves environmental surveys, wind measurements and hydrometeorological studies. They are all progressing in line with the schedule, as necessary to duly prepare the Environmental Impact Assessment Report.

PKN ORLEN is also engaged in dialogue with potential business partners within the sector to secure infrastructure facilities for the construction and operation of the Offshore Wind Power project.

In 2019, a procedure was launched to contract an experienced business partner for the Offshore Wind Power project. Agreements were signed with legal and transaction advisors, and negotiations with a number of potential partners having relevant experience and know-how were commenced.

The ORLEN Group’s logistic assets

The logistics infrastructure is one of the key elements of the ORLEN Group's competitive advantage.

The Group operates a network of complementary infrastructure assets: fuel terminals, onshore and offshore handling depots, transmission pipelines, rail transport, and transport by road tankers.

In 2019, pipelines were the primary mode of transport of feedstock and products used by the ORLEN Group. The total length of product and feedstock pipeline networks, both Group- and third party-owned, used by the ORLEN Group in Poland, the Czech Republic and Lithuania was nearly 3.7 thousand km (including 2.1 thousand km of product pipelines, and 1.6 thousand km of feedstock pipelines).

In Poland, PKN ORLEN uses 958 km of pipelines for fuel product transport: 620 km of pipelines owned by Przedsiębiorstwo Eksploatacji Rurociągów Naftowych S.A., as well as its own transport infrastructure with a total length of 338 km, comprising two sections: Płock – Ostrów Wielkopolski – Wrocław (319 km) and Wielowieś – Góra (19 km). Crude oil is transported mainly via the network of pipelines owned by Przedsiębiorstwo Eksploatacji Rurociągów Naftowych S.A. (total lengths of 887 km), and via the Group’s own pipeline (43 km), connecting Góra and Żółwiniec (link to the PERN pipeline).

In 2019, the ORLEN Group used a total of 27 facilities in Poland to receive, store, dispatch and handle fuels (Group- and third party-owned fuel terminals). As at the end of 2019, the total storage capacity available to the Group within its own infrastructure and contracted from third parties was over 2.7 million m3.

In 2019, the ORLEN Group used 1,741 km of pipelines in the Czech Republic (1,100 km of product pipelines operated by ČEPRO, and 641 km of feedstock pipelines operated by MERO), 7 storage and distribution depots owned by state-owned operator ČEPRO, 3 terminals owned by the Group and 7 external terminals not belonging to CEPRO.

The main component of the logistics infrastructure currently used on the Lithuanian market is a 91-km feedstock pipeline linking the Butinge terminal with the Mazeikiai refinery. Both the terminal and the pipeline are owned by ORLEN Lietuva.

On the German market, ORLEN Deutschland uses the storage and distribution capacities of seven third party-owned depots. Products are delivered by tank trucks, railway and barges.

Transport structure and logistic infrastructure used by the ORLEN Group in Europe in 2019

Infografika-Orlen-2019 (S)_mapa2-37 Infografika-Orlen-2019 (S)_mapa2-37

Source: Own preparation.

ORLEN Group’s market shares in the downstream segment

Wholesale of refining products

In 2019, the ORLEN Group was involved in wholesale distribution of refining products in Poland, the Czech Republic, Germany, Slovakia, Hungary, Austria, Lithuania, Latvia, Estonia and Ukraine, and in Western Europe, where products were delivered to transhipment terminals by sea. The ORLEN Group’s home markets are Poland, Lithuania and the Czech Republic. The Group has an extensive portfolio of refining products, including gasoline, diesel oil, A-1 jet fuel, light and heavy heating oil, bitumen, engine oils and a wide range of non-fuel products and semiproducts.

Market share in Poland

Source: Own preparation.


  • Strong sales allowed the ORLEN Group to maintain the leading position in the Polish fuel sales market.
  • Slight decrease in market share as a result of optimization of sources of supply and maximization of own production share in the sales structure.

Market share in the Czech Republic

Source: Own preparation.

  • The ORLEN Group is the leader in fuel sales in the Czech Republic.
  • Further increase in total market share of 5.1 p.p. (y/y) in the range of gasoline and diesel oil.

Market share in the Baltic states

Source: Own preparation.

  • The ORLEN Lietuva Group strengthened the leader position in the Baltic States markets despites strong price pressure from Finnish, Belarusian and Russian suppliers.
  • Increase in the total shares on the Baltic States markets of 1.1 p.p. to the level of 77.5% attributable to increase in market share in Lithuania of 2.2 p.p. to 76.6%.

Wholesale of petrochemical products

The ORLEN Group is the largest petrochemical company in the Central and Eastern Europe, the only manufacturer of monomers and polymers on the Polish market, and the manufacturer of most of the petrochemical products available on the Czech market.

Polyethylene producers in Europe

Source: Own preparation based on POLYGLOBE.

  • Europe’s production capacities for high-density and low-density polyethylene are currently at around 13,287 thousand tonnes per year.
  • Lyondell Basell Industries − the largest polyethylene manufacturer, with an annual production capacity of approximately 2,170 thousand tonnes, including its 50% share in Basell ORLEN Polyolefins Sp. z o.o. (BOP) and production assets in Germany, France and Poland.
  • Ineos Olefins & Polymers Europe, with an annual production capacity of approximately 1,745 thousand tonnes and assets in Belgium, France, Germany, Italy and Norway and Sabic – production capacity of around 1,590 thousand tonnes per year and assets in Germany, the Netherlands and the UK.
  • The total production capacity of the ORLEN Group, with production sites in Poland and the Czech Republic (including its 50% share in BOP), is approximately 530 thousand tonnes per year.

Polypropylene producers in Europe

Source: Own preparation based on POLYGLOBE.

  • Europe’s annual production capacities for polypropylene are at around 11,749 thousand tonnes.
  • Lyondell Basell Industries has an annual production capacity of around 2,405 thousand tonnes (including its 50% share in BOP) and assets in Germany, France, Italy, Spain, UK and Poland.
  • Borealis, with an annual production capacity of approximately 1,920 thousand tonnes and assets in Belgium, Germany, Austria and Finland.
  • Total Petrochemicals, with a production capacity of around 1,310 thousand tonnes per year and assets located in Belgium and France.
  • The total production capacity of the ORLEN Group, with production sites in Poland and the Czech Republic (including its 50% share in BOP), is approximately 520 thousand tonnes per year.

PTA producers in Europe

Source: Own preparation based on PCI.

  • The European nominal PTA production capacities total 4,205 thousand tonnes per year.
  • Indorama – Europe’s largest PTA manufacturer (following the acquisition of Artlant), with a nominal production capacity of 1,775 thousand tonnes per year and assets located in Portugal, Spain and the Netherlands.
  • BP Chembel NV – Europe’s second largest PTA manufacturer, with an annual production capacity of 1,400 thousand tonnes, located in Belgium.
  • PKN ORLEN is the only manufacturer in Europe to have production units fully integrated with paraxylene production, and its production capacity totals 690 thousand tonnes per year.

PVC producers in Europe

Source: Own preparation based on Market Analytics – Vinyls – 2019 (Nexant).

  • The European nominal PVC production capacities total 8,060 thousand tonnes per year.
  • Europe’s leading PVC manufacturer – Inovyn, was formed following the combination of Ineos Chlor and Solvay; its annual production capacity is 2,005 thousand tonnes.
  • Other manufacturers, such as Kem One, Vynova, and Vinnolit, have annual PVC production capacities estimated at 882 thousand, 830 thousand and 780 thousand tonnes, respectively.
  • Other, including The Karpatneftekhim plant, with nominal production capacities of ca. 300 thousand tonnes annually.
  • The ORLEN Group, with the annual production capacity of its Anwil and Spolana units at 475 thousand tonnes, ranks fifth on the European plastics market.
  • Anwil’s principal competitors are Inovyn and Vynowa in Europe and BorsodChem in Poland.

Sales volume of the Downstream segment

In 2019, the ORLEN Group’s total Downstream sales reached 32,740 thousand tonnes, having gone up on 2018. Lower sales of refining products in Poland combined with growing sales on foreign markets were offset by rising sales of petrochemical products driven by higher availability of the Group’s production assets.

The ORLEN Group sales in the Downstream segment [PLN million/thousand tonnes]

Sales 2019 2018 change %
Value Volume Value Volume
1 2 3 4 5 6=(2-4)/4 7=(3-5)/5
Light distillates1 12,098 5,231 12,925 5,450 (6.4%) (4.0%)
Medium distillates2 35,916 13,974 34,787 13,653 3.2% 2.4%
Heavy fractions3 6,369 4,784 7,339 5,032 (13.2%) (4.9%)
Monomers4 3,585 1,022 3,260 849 10.0% 20.4%
Polimers5 2,390 519 2,643 540 (9.6%) (3.9%)
Aromas6 1,080 424 1,096 367 (1.5%) 15.5%
Fertilizers7 903 1,030 825 1,067 9.5% (3.5%)
Plastics8 1,218 343 1,409 371 (13.6%) (7.5%)
PTA 1,893 647 1,528 508 23.9% 27.4%
Other9 6,152 4,766 5,851 4,879 5.1% (2.3%)
Total 71,604 32,740 71,663 32,716 (0.1%) 0.1%
1) Gasoline, LPG. 2) Diesel oil, light heating oil, jet fuel. 3) Heavy heating oil, bitumen, oils. 4) Ethylene, propylene. 5) Polyethylene, polypropylene. 6) Benzene, toluene, paraxylene, ortoxylene. 7) Canwil, ammonium sulphate, ammonium nitrate, other fertilizers. 8) PVC, PVC granulate. 9) Other contains mainly: brine, salt base, vacuum distillates, acetone, ammonia, butadiene, phenol, technical gases, glycols, caprolactam, caustic soda and sulphur. Additionally, in value terms revenues from sale of services of the segment and materials.

Sales revenue structure of the ORLEN Group Downstream segment

In 2019 and 2018 none of the ORLEN Group’s leading customers accounted for more than 10% of the Group’s total revenue.

Sales markets and market shares

Sales volume of the ORLEN Group in the Downstream segment on domestic markets1) (in thousands of tonnes)

Sales 2019 2018 change change %
2 3 4=(2-3) 5=(2-3)/3
Poland 17,620 17,777  (157) (0.9%)
Baltics states 8,512 8,441 71 0.8%
Czech Republic 6,608 6,498 110 1.7%
Total 32,740 32,716 24 0.1%
1) by country of headquarter of company carrying out the sales.

Polish market

In 2019, Poland was among the fastest growing EU economies. Household consumption was on the rise, driven by an anticipated increase in public spending, labour market challenges and rising wages. Positive economic growth prospects were further supported by a low interest rate environment and realization of financial investments including EU funded.

The ORLEN Group was a main supplier to major foreign fuel companies, while further expanding its operations in the SME sector though ORLEN Paliwa.

Sales volume of the ORLEN Group in the Downstream segment on the Polish market [thousands tonnes]

Sales 2019 2018 change change %
2 3 4=(2-3) 5=(2-3)/3
Light distillates 1,736 1,837 (101) (5.5%)
Medium distillates 7,196 7,164 32 0.4%
Heavy fractions 2,228 2,503 (275) (11.0%)
Monomers 836 693 143 20.6%
Aromas 210 164 46 28.0%
Fertilizers 863 881 (18) (2.0%)
Plastics 252 276 (24) (8.7%)
PTA 647 508 139 27.4%
Other 3,652 3,751 (99) (2.6%)
Total 17,620 17,777 (157) (0.9%)

Structure of sales volume of the ORLEN Group in the Downstream segment on the Polish market

In 2019, the ORLEN Group’s sales in Poland reached 17,620 thousand tonnes, down (157) thousand tonnes year on year. The slight decline of the overall sales volume was attributable to lower sales of low-margin heavy refining fractions, down (275) thousand tonnes year on year, which was driven, among other factors, by a significant improvement in fuel yields at PKN ORLEN.

In 2019, PKN ORLEN continued to prepare for the upcoming IMO 2020 regulations with respect to production and sale of heavy fuel oil with a reduced sulfur content, which included the market launch of LSFO (low sulfur fuel oil). As of January 2020, the sulfur content cap for bunker fuels (also outside the Emission Control Areas) has been reduced from 3.5% to 0.5%.

Sales of light distillates in the Downstream segment alone dropped by (5.5)% year on year. As the Downstream segment delivers fuels also to the Retail segment, in 2019 the aggregate sales figure for light distillates sold by both segments increased 0.7% year on year.

A 0.4% year-on-year increase in sales of middle distillates was driven by higher sales of Jet A-1 aviation fuel. Sales of this fuel have been on the rise for several years now, propelled by strong growth of Poland’s aviation services market. The ORLEN Group’s share of aviation fuel sales on the Polish market remained at approximately 82.5%. The Group was also expanding into-plane fuel sales and continued its supplies to strategic customers, including the Polish Army. 2019 saw the launch of production and sales of the JP-8 aviation fuel to meet the needs of the US army units deployed in Poland. PKN ORLEN is also a Strategic Partner to IATA (the International Air Transport Association).

Sales of diesel oil remained more or less flat year on year, while sales of light fuel oil declined due to mild weather and consumers switching to more cost-effective energy carriers, mainly natural gas.

In the petrochemical segment in Poland, sales of monomers, aromatics and PTA went up year on year (by 20.6%, 28.0% and 27.4%, respectively), driven by higher availability of the Group’s production facilities (with no scheduled maintenance shutdown of the Olefins unit in 2018). PVC sales were down by (8.7)% as a combined effect of unit shutdowns, falling demand, and more intensive competition from Russian, Ukrainian and US PVC producers. Sales of artificial fertilizers were down (2.0)% reflecting limited demand from retail customers caused by unfavourable weather conditions (high temperatures).

The Baltic States and Ukraine

Despite weaker growth year-on-year, the Baltic States still reported positive GDP figures. According to preliminary data released by the International Monetary Fund (IMF), the 2019 GDP growth figures for Estonia and Latvia reached 3.2% and 2.8% (year on year), respectively.

The Baltic States are attractive markets for Scandinavian, Russian and Belarusian fuel producers. The Scandinavian countries and Belarus have large surpluses of diesel oil and gasolines, and are constantly looking for opportunities to place the fuels abroad.

Sales volume of the ORLEN Group in the Downstream segment on the markets serviced by the ORLEN Lietuva Group [thousand tonnes]

Sale 2019 2018 change change%
2 3 4=(2-3) 5=(2-3)/3
Light distillates 2,486 2,614 (128) (4.9%)
Medium distillates 3,862 3,700 162 4.4%
Heavy fractions 1,881 1,888 (7) (0.4%)
Monomers 18 0 18
Other 265 239 26 10.9%
Total 8,512 8,441 71 0.8%

Structure of sales volume of the ORLEN Group in the Downstream segment on the markets serviced by the ORLEN Lietuva Group

Despite a challenging operating environment due to aggressive competitive policies of importers, the ORLEN Lietuva Group’s sales volumes in 2019 rose 0.8% year on year, to 8,512 thousand tonnes. The best figures were reported for middle distillates, with sales going up 4.4%. Sales volumes of the Jet A-1 aviation fuel also rose considerably, up 24.9% year on year. Sales of diesel oil grew 2.1% year on year.

On the other hand, sales of light distillates declined by (4.9)% year on year.

ORLEN Lietuva actively participated in balancing the ORLEN Group’s deficits on the Polish market. In 2019 significant product volume were supplied to Poland both by road and sea.

For several years now, Ukraine’s economy has been growing at a satisfactory pace. According to the IMF, in 2019 the country’s GDP grew 3.0% amid high inflation, of 8.7%. Ukraine continues to be perceived as an unstable, risk-laden market, which does not encourage new investment with a potential to drive growth in transport needs.

In 2019, the downward trend in gasoline consumption, which had continued for a number of years, finally reversed. The gasoline market rose by as much as 13.3%, while diesel oil consumption went up 5.3% year on year. The second half of 2019 saw a significant drop in the supply of diesel oil following imposition of a 4% duty on the Russian product supplied via pipeline. This put an end to diesel oil supplies via this route and meant that imports from Belarus, Lithuania and by sea needed to be significantly increased. In 2019, Jet A-1 consumption returned to 2018 levels, down (35)% on 2018, mainly as a result of closure of the legal loophole that permitted blending the Jet A-1 fuel with diesel oil.

In 2019, as in previous years, the Ukrainian fuel market faced strong pressures from Russian and Belarusian exporters offering competitively-priced products. Despite this, the ORLEN Lietuva Group’s fuel sales hit a record high of nearly 1m tonnes. The largest contributors were sales of gasoline and the Jet A-1 fuel. Among factors that helped achieve such excellent results were supply constraints and its reputation of a reliable and trustworthy supplier.

The source of the ORLEN Lietuva Group’s greatest competitive advantage is the precision and timeliness of supplies, regardless of any geopolitical developments in the region. The ORLEN Group has been building its position as a stable and reliable partner for years. It is the only Western oil group operating in Ukraine, whose condition is least affected by the unstable political landscape in Ukraine, not to mention the country’s fraught relations with Russia.

Czech market

The favourable macroeconomic climate and market conditions (GDP and consumption levels) have had a material effect on the ORLEN Group’s sales performance in the Czech Republic.

Sales volume of the ORLEN Group in the Downstream segment on the Czech market [thousands tonnes]

Sales 2019 2018 change change %
2 3 4=(2-3) 5=(2-3)/3
Light distillates 1,009 999 10 1.0%
Medium distillates 2,916 2,789 127 4.6%
Heavy fractions 675 641 34 5.3%
Monomers 168 156 12 7.7%
Polimers 519 540 (21) (3.9%)
Aromas 214 203 11 5.4%
Fertilizers 167 186 (19) (10.2%)
Plastics 91 95 (4) (4.2%)
Other 849 889 (40) (4.5%)
Total 6,608 6,498 110 1.7%

Structure of sales volume of the ORLEN Group in the Downstream segment on the Czech market

Year 2019 was a period of recouping the Group’s market shares and sales volumes lost following maintenance shutdowns of its production units in 2018, and of pursuing an ambitious strategic objective to introduce the UIC price index. The index was accepted by all market participants, including public institutions, having become part of the market practice. All contracts for 2020 were concluded based on UIC.

In 2019, the Unipetrol Group’s sales volumes rose 1.7% year on year, to 6,608 thousand tonnes. Strong results were recorded on middle distillate (up 4.6% year on year), driven mainly by a 38.2% year-on-year increase in the sales of the Jet A-1 aviation fuel. Diesel oil sales grew 3.7% year on year, while a 1.0% year-on-year increase in light distillate sales was attributable to higher sales of gasoline (up 1.9% year on year).

In 2019, the Unipetrol Group continued selling its products to a broad customer base, including large fuel companies and hypermarket chains. Unipetrol sold its products on foreign markets, including Slovakia, Hungary, Germany, Austria and Poland, as part of the strategy to optimise product flow management within the ORLEN Group.

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Supply sources

Crude oil

PKN ORLEN supplies crude oil to the Płock refinery and to three other ORLEN Group refineries, in Litvínov and Kralupy in the Czech Republic, and in Lithuania’s Mažeikiai.

In late April and early May 2019, due to contamination of Russian crude oil with organic chlorides and temporary suspension of deliveries via the Druzhba pipeline, there was a significant reduction in pipeline deliveries, as reflected by a change in the monthly structure of oil supplied under long-term contracts to Poland and the Czech Republic. The share of more expensive low-sulfur crudes imported by sea was increased to ensure the continuity of supplies and processing.

In 2019, two long-term contracts for oil deliveries via pipeline to the Płock refinery (with Rosneft Oil Company and Tatneft Europe AG), a long-term contract (with Saudi Arabian Oil Company) and a six-month contract (with Saudi Aramco Products Trading Company (“ATC”), a subsidiary of Aramco) for oil deliveries by sea were in force.

The feedstock for all refineries of the ORLEN Group was procured from oil producers and other companies operating on the international oil market. The crude oil supplied to Płock came primarily from Russia and Saudi Arabia, but was also imported from Angola, Kazakhstan, Nigeria, Norway, Poland, the United States and the United Kingdom. The refineries in the Czech Republic received the feedstock from Russia, Saudi Arabia, Azerbaijan, Kazakhstan, Libya, Nigeria and the United States. The Mažeikiai refinery was primarily supplied with Russian oil, with additional deliveries from Saudi Arabia, Kazakhstan, the United States and the United Kingdom.

In 2019, the share of Rosneft Oil Company in the crude supplies exceeded 10% of the ORLEN Group’s total revenue.

Natural gas

The ORLEN Group is potentially the largest gas consumer in Poland and one of the largest in the Czech Republic and Lithuania. Natural gas is used by the Group in the production of heat, electricity, fuels and fertilizers. In Poland the ORLEN Group’s combined potential for natural gas consumption exceeds 3bn Nm3 per year, accounting for approximately 20% of total consumption. Natural gas is used by the Group mainly at the following locations:

  • PKN ORLEN’s Production Plant in Płock: for refinery, petrochemical, electricity and heat production.
  • Anwil’s Production Plant in Włocławek: for fertilizer production.
  • CCGT unit in Płock: for electricity and heat production.
  • CCGT unit in Włocławek: for electricity and heat production.
  • Production Plants in Kralupy, Litvínov, Kolín and Pardubice (Unipetrol), and the Production Plant in Neratovice (Spolana): for refinery, petrochemical, electricity, heat and fertilizer production.
  • Production Plant in Mažeikiai: for electricity and heat production.

Most deliveries of natural gas to the ORLEN Group companies in Poland are made under a five-year contract signed in 2016 by PKN ORLEN and PGNiG, and under additional contracts with major European gas suppliers. Gas is also purchased on the Polish Power Exchange. The ORLEN Group takes steps to ensure stability of supplies and to lower gas procurement costs through such measures as diversification of supply sources, centralisation of gas trading functions and further development of the trading expertise. The current portfolio of gas contracts allows the Group to optimise gas procurement costs by selecting the underlying gas indices and delivery points.

PKN ORLEN has gas transmission contracts with both domestic and foreign operators, ensuring full support in natural gas logistics for the Production Plant in Płock, CCGT Włocławek, and CCGT Płock.

PKN ORLEN has also been developing natural gas sales on both retail and wholesale markets.

ORLEN Group is engaged in a number of exploration and production projects to secure its own sources of natural gas.

In 2019, the value of deliveries by none of the suppliers of natural gas to the ORLEN Group accounted for more than 10% of the Group’s total revenue.

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