Page 4 - FSUOGM Week 03 2022

FSUOGM COMMENTARY FSUOGM

Aramco’s downstream footprint

expands with PKN Orlen deal

Saudi Aramco has signed European crude supply and downstream deals as the
company resumes its global refining and market share push

POLAND SAUDI Aramco this week agreed to buy assets sell 185 fuel stations in Hungary and Slovakia to
belonging to Grupa Lotos, the sale of which had PKN for $259mn.
WHAT: been declared last year by the European Com- PKN also signed a deal for 200,000-337,000
Aramco has bought mission as a prerequisite for the Polish firm’s bpd of crude from Aramco, with the Polish firm’s
stakes in refining and takeover by compatriot PKN Orlen. CEO Daniel Obajtek telling journalists that
fuel distribution assets The move marks Aramco’s return to Euro- deliveries would begin this year, providing the
in Poland, signing a pean refining and comes just a few days after the Gdansk acquisition goes through.
significant crude supply Saudi firm’s trading arm signed a deal to supply These volumes come in addition to an exist-
deal. crude to a refinery in Denmark, further strength- ing contract for 100,000 bpd of Saudi crude for
ening its position in commodity markets. Gdansk which is renewed annually. Argus Media
WHY: cited tracking data as showing that Aramco’s
The Saudi firm is Polish position existing crude shipments to Gdansk are deliv-
resuming its downstream Following the proposed Polish merger, Aramco ered from storage facilities at Sidi Kerir in Egypt.
expansion while also will pay PKN Orlen around $255mn for a 30% The PKN CEO said that once the deal is com-
leveraging its growing stake in bitumen manufacturer Lotos Asfalt, plete, Saudi crude could account for up to 45%
trading arm to increase which owns the 210,000 barrel per day (bpd) of its total feedstock, with flows to be directed
market share. Gdansk refinery; $250mn for 100% of a whole- to refineries including Kralupy and Litvinov in
sale business Lotos SPV 1; and an undisclosed the Czech Republic, Mazeikiai in Lithuania and
WHAT NEXT: fee for 50% in the Lotos-Air BP Polska jet fuel Plock and Gdansk in Poland.
With another deal signed marketing joint venture with BP. The Economist Intelligence Unit (EIU)
to sell crude to a refinery Meanwhile, in order to satisfy European anti- expects total Polish petroleum product demand
in Denmark, the company trust legislation, Hungary’s MOL agreed to buy to rise by around 4% this year to reach 633,000
is making a meaningful 417 Lotos fuel stations for $610mn and signed bpd, with transportation accounting for nearly
return to European a long-term fuel supply deal with PKN for its two thirds of this.
markets. new Polish retail network. In return, MOL will Aramco said the investments would widen

P4 www. NEWSBASE .com Week 03 20•January•2022