Sunday, September 27, 2020
Home Oil & Gas PKN Orlen and PGNiG considers joint investment in Ostrołęka power plant

PKN Orlen and PGNiG considers joint investment in Ostrołęka power plant

Poland’s largest refiner PKN Orlen and state natural gas company PGNiG signed a letter of intent regarding potential cooperation in the construction of a steam and gas block in Ostrołęka and the development of a biogas plant.

According to the press statement released by PKN Orlen, both parties will start to analyse the possibilities of joint investments in gas energy and biogas. The projects include the construction of a combined cycle gas turbine (CCGT) block in Ostrołęka with a capacity of approximately 750 megawatts (MW) by the end of 2024 and the development of a biogas plants network with the power of 2-2,2 MW each by the end of 2025.

“We want to maximise the potential of our companies to achieve tangible business benefits,” said Daniel Obajtek, President of the Management Board of PKN Orlen.

He emphasised that cooperation with PGNiG ensures that both companies can implement investments more effectively as part of the energy transformation process. Mr Obajtek pointed out that the letter of intent is bringing PKN Orlen one step closer to the construction of the Ostrołęka power plant in gas technology, as well as to intensify efforts to create a biogas plant network.

“This is a good example of cooperation between Polish companies aimed at developing their activities and strengthening the Polish economy in line with the European energy policy,” he concluded.

Jerzy Kwieciński, President of PGNiG highlighted that the joint investment in the construction of a CCGT unit at the Ostrołęka power plant is an opportunity to strengthen PGNiG’s value and position on the natural gas market as well as in the energy generation segment.

PKN Orlen has concluded the acquisition of ENERGA Group in April, which came with the Ostrołęka power plant, supposedly one of the last coal-fired thermal power stations in Poland. Early in May, the company confirmed its decision to move further with the investment only under the condition of switching the plant to gas-based technologies.
At that time, Mr Obajtek said that the investment in Ostrołęka will be implemented, but it must be based on gas technology in line with market trends and the European Union’s regulatory policy.

According to the letter of intent, the parties will establish the most important principles of potential cooperation, including its legal, technical and financial conditions and in case of a positive outcome, binding draft cooperation agreements will be prepared by the end of October.

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