Refineries operating in the region

Situation on the Polish fuel and fuel products market is affected by the operations of several neighbouring refineries.

Apart from the market leader, the refinery of PKN Orlen S.A. in Płock, the other refineries operating in the region also supply their products to the Polish market, thus competing with Grupa LOTOS.

In the first half of 2021, the trend of reducing refinery throughput continued due to sustained pandemic restrictions in most countries. However, as of the second half of the year, due to growing global demand and the resulting recovery of crack spreads, refinery throughput was increasing. In addition, the trend of converting conventional refineries into plants producing fuels from feedstocks of plant origin (biorefineries) has become more pronounced since 2020. Such steps have been taken by TOTAL in France, Neste in Finland and ENI in Italy, among others. The economic recession that took hold in 2020 and continued into 2021 is a factor behind decisions of individual refineries whether to continue their operations and undertake further capital projects.

Grupa LOTOS has a technologically advanced refinery, boasting one of the highest complexity factors in the growing region of Central Europe (with the Nielsen Complexity Index of 11.1).

Strong yield flexibility has enabled the Company to weather the elevated market volatility sparked by the COVID-19 pandemic, affecting demand and crack spreads. This is clearly visible after the decline in refinery capacity utilisation. In Europe (in the NWE and CEE regions combined), capacity utilisation decreased from 84% in 2019 to 76% in 2020, to rebound to 80% in 2021. However, the complexity of the Gdańsk refinery allowed Grupa LOTOS to redirect refinery output streams into products such as base oils and bitumens. This helped maintain throughput well above the European average.

Rafineries in Central Europe: capacity and Nelson Complexity Index (NCI)

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Source: In-house analysis based on Company data and data from PKN Orlen,  MOL Group, Rosneft, S&P Global Platts.

  • Płock refinery (PKN ORLEN), Poland – approximately 16.5 million tonnes,
  • Leuna refinery (TOTAL Group), Germany – approximately 11.6 million tonnes,
  • Schwedt processing refinery (PCK Raffinerie GmbH), ownership – ENI/ROSNEFT, Germany – approximately 11.8 million tonnes,
  • Mažeikiai refinery (PKN Orlen), Lithuania – nameplate capacity of approximately 15 million tonnes, but in view of the existing technology set-up and market conditions, only about 8 million tonnes of the capacity is effectively utilised,
  • Schwechat refinery (OMV), Austria – approximately 10.1 million tonnes,
  • UniPetrol refineries in Kralupy, Litvinov (PKN Orlen), the Czech Republic – approximately 8.7 million tonnes,
  • Bratislava refinery (Slovnaft, MOL Group), Slovakia – approximately 6.1 million tonnes.
  • Bayernoil processing refinery (Vohburg – ENI/VARO/ROSNEFT), Germany – approximately 10.7 million tonnes,
  • MiRO processing refinery (Karlsruhe – PHILLIPS 66/EXXONMOBIL/SHELL/ROSNEFT), Germany –approximately 16 million tonnes,o Holborn Europa Raffinerie processing refinery (Hamburg – Holborn European Marketing), Germany –approximately 4.7 million tonnes
  • Ruhr Oel Refinery processing refinery (Gelsenkirchen – BP), Germany – approximately 12.9 million tonnes

Grupa LOTOS refinery vs competitors in the region

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Source: Company, refining capacity (m tonnes/year)

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