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CMS Advises PKN Orlen on Investent in New Metathesis Unit

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CMS has advised PKN Orlen on an investment in a new metathesis unit for the production of polymer-grade propylene which will enable propylene production capacity at PKN Orlen’s plant in Plock to increase by about 100,000 tonnes a year, to a level of 550,000 tonnes.

CMS reports that PKN Orlen's investment is now entering the implementation phase, and estimates its value at PLN 400 million. The firm's work included preparation of the contract for the design, supply, and construction of a “turnkey” metathesis unit and representation of PKN Orlen in negotiations with potential contractors.

“Our objective is to effectively diversify revenue sources and strengthen the efficiency of the Orlen Group’s Downstream Segment,” said Wojciech Jasinski, President of the Management Board of PKN Orlen. "We want to maximize capacity utilization in Poland and the Czech Republic, and push for greater integration between petrochemical and refining areas, which will give us flexibility required to respond to market changes in demand for fuels and petrochemicals. We will focus on products with a broad range of applications in the plastics industry, because the industry’s purchasing power is growing and its medium-term prospects point to a steadily upward trend.” 

“In this type of investment contracts it is crucial to properly allocate tasks, responsibilities and risks between the investor and the contractor, as well as precisely define the scope of the contractor’s work, so as to avoid potential disputes when the contract is carried out,” added CMS Partner Iga Lis.

The firm’s team consisted of Lis, fellow CMS Partners Tomasz Minkiewicz and Karolina Siedlik, and CMS Senior Associate Maciej Ziolkowski.

Image Source: orlen.pl