PKN ORLEN signs first long-term contract with Saudi Aramco

In 2015 The Naftoport Oil Terminal provided services for 366 tankers, including 106 vessels of capacity over 80 000 tons. Photo: Naftoport Gdansk

PKN ORLEN has signed a contract with Saudi Aramco for the supply of ca. 200 thousand tonnes of crude oil monthly to its refineries – the Polish company reveals.

The contract will be effective from May 1st to December 31st 2016, with an option of automatic renewal for successive years. The oil will be processed by all PKN ORLEN’s refineries in Poland, the Czech Republic and Lithuania.

– This is the first direct long-term contract with a supplier from the Gulf region in the history of our company. It shows the direction of our thinking on strategic diversification of crude supply sources, which is centred on partnering with tested oil producers from different geographical regions and on securing optimum supply terms. We have repeatedly announced our intention to use market opportunities to secure an optimal supply structure and good financial terms, and we are delivering on this objective – said Wojciech Jasiński, PKN ORLEN’s CEO and President of the Management Board.

PKN ORLEN seeks to ensure stable supplies of the feedstock for its refineries, and is therefore consistently pursuing its supply diversification policy. Since the beginning of 2016, the Company has already received six spot deliveries from Saudi Aramco. But at the same time, considering the rising opportunities on the global crude oil markets, PKN ORLEN does not rule out the possibility of sourcing oil from different directions.

According to Polish expert, this step frightens Russian Rosnieft, since it may be regarded as the start of a big process.

– Polish PKN Orlen’s long term oil deal with Saudi Aramco may change the game in the region – says Wojciech Jakobik, an energy analyst from Jagiellonian Institute in Poland’s Krakow. – Sweden, Finland and others stand in line. Poland is changing the game in Central and Eastern European (CEE) region – says the analyst. He said that in the future, Poland could provide supplies to Ukraine and added.

– In this way Poles throw a gauntlet to Kremlin. Rosneft boss was afraid that cheap Saudi oil will crush Russian position on CEE market – Jakobik emphasizes.

According to Jakobik, this is the beginning of this process and it is a big success and one of the first steps of full diversification in CEE.

– Oil port in Gdansk, Polish city on the Baltic coast, principal seaport of the country, is getting more important – he also noted.

Its worth mentioning, that in 2015 the Naftoport Oil Terminal in the Port of Gdansk provided services for 366 tankers, including 106 vessels of capacity over 80 000 tons. Altogether, Naftoport handled 14,281 mln tons of liquid fuels, including crude oil (75%) and refined oil products (25%). The record-breaking transhipment volume has been achieved not only in the history of Naftoport but also in the history of the entire Oil Terminal of the North Port.

Saudi Aramco is an integrated oil and chemicals company, a global leader in hydrocarbon production, refining processes and distribution, as well as one of the largest global oil exporters. It manages proven reserves of crude oil and condensate estimated at 261.1bn barrels, and produces 9.54 million bbl daily. Headquartered in Dhahran, Saudi Arabia, the company employs over 61,000 staff in 77 countries.

rel (PKN Orlen), GL