Page 4 - DMEA Week 02 2022

DMEA COMMENTARY DMEA

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.

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

P4 www. NEWSBASE .com Week 02 13•January•2022