Lotos Signs Hydrocracker Deal to Expand Output
by AFX News Limited
June 21, 2007
Lotos, Poland's second largest oil group, on Thursday signed a 2.2 billion zloty contract to build a new hydrocracking unit as part of its plan to upgrade its refinery and at least double sales over the next five years.
The Gdansk-based refiner, which produces four times less oil than local peer
PKN Orlen, said the deal with France's Technip would help boost its capacity by
three quarters to 10.5 million tonnes after it comes online in 2011.
It said the plant would also churn out products with higher margins than its
"We want to add the new installation to become more flexible and add 4.5 million tonnes in production annually," Lotos deputy head for production and development Marek Sokolowski told a news conference.
Lotos wants to invest around US$2 billion to expand its infrastructure in the next four years and will seek to borrow US$1.5 billion from banks to cover its investment plan.
Asked what the impact of the upgrades on the company's revenues would be,
CEO Pawel Olechnowicz told reporters: "20 billion zlotys is the minimum (we should
achieve by 2012) and we should exceed this plan."
Lotos earned 915 million zlotys on 9.6 billion in sales last year.
Lotos' stock inched up after the news of the contract to stand 0.5 percent
higher at 48.9 zlotys by 1430 CET, valuing the company at around 5.6 billion zlotys.
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