bp plc has entered a 12-month deal to supply crude oil produced from its North Sea fields offshore Norway to Orlen SA’s refineries in Poland and Lithuania.
As part of the agreement, bp will deliver an overall 6 million tonnes/year (tpy) of Norwegian crudes from the North Sea to either the Polish port of Gdańsk or the Lithuanian port of Būtinga based on Orlen’s regional feedstock demand, the two companies said in separate Aug. 19 releases.
The first crude delivery under the 1-year contract—the entirety of which will cover about 15% of Orlen’s system-wide feedstock requirements—is scheduled to arrive in Gdańsk in September 2024, the parties said.
Structured to provide flexibility of supply, the agreement with bp forms a key element in Orlen’s ongoing diversification of its feedstock portfolio and will contribute to enhanced efficiency of its processing sites, said Ireneusz Fąfara, Orlen’s chief executive officer and president.
“[Oil] we will acquire through this contract is not only of consistent quality and sourced from geographically close North Sea fields but also has properties that ensure high yields and is well-suited to the processing technologies at our refineries,” Fafara said.
In addition to North Sea crudes, bp’s trading team will also be able to provide access to many of the other crude grades processed by Orlen refineries, said Bogdan Kucharski, bp Poland’s chief executive.
The two companies said they also plan to work together on future opportunities to advance each’s energy transition initiatives.
This latest crude supply contract follows a previous 12-month agreement Orlen signed with bp in June 2023 for more than 6 million tpy of the latter’s North Sea crude production, Orlen confirmed via a June 27, 2023, release.
Orlen said its supply of North Sea crudes currently includes Forties and Brent from the UK, as well as Oseberg, Johan Sverdrup, Troll, Grane, Brent, and Ekofisk from Norway. Its refineries also receive US-sourced West Texas Intermediate (WTI), Bakken, and Mars grades, in addition to West African Forcados and Bonny Light crudes.
Sourcing of North Sea grades for its refineries comes as part of Orlen’s continuation of its program to tap crude supplies from directions other than Russia, which—alongside the North Sea, West Africa, the Mediterranean basin, and the US—includes unidentified grades from the Arabian Gulf, the operator said.
One of the first European companies to abandon imports of Urals oil by sea following Russia’s invasion of Ukraine, Orlen in first-quarter 2023 doubled down by also not renewing its supply contract with Rosneft Oil Co. and terminated its agreement with PJSC Tatneft to completely cut off supply of Russian oil into Poland, the company said.
By yearend 2023, Orlen’s Polish refineries had completely ceased processing of Russian crudes, according to the operator’s latest annual report.
As recently as 2013, Orlen said as much as 98% of crude volumes processed at the Plock refinery was sourced from Russia.
Refining operations
With a combined nameplate crude processing capacity of about 45.7 million tpy that translated into actual overall throughputs of 38.5 million tpy by yearend 2023, Orlen operates five major refineries, including:
- The company’s owned 16.3-million tpy integrated refining and petrochemical complex in Płock, Poland (OGJ Online, July 3, 2023).
- Rafineria Gdańska sp. z o.o.’s 10.5-million tpy refinery in Gdańsk, Poland, jointly owned by Orlen (70%) and Saudi Aramco (30%) (OGJ Online, Nov. 30, 2022).
- Orlen subsidiary Orlen Lietuva AB’s 10.2-million tpy refinery in Mažeikiai, Lithuania, the only in the Baltic States that—alongside Lithuania—includes Latvia and Estonia (OGJ Online, Aug. 3, 2023; May 4, 2023).
- Orlen Unipetrol SA subsidiary Orlen Unipetrol RPA SRO’s two refineries in the Czech Republic, including its 3.3-million tpy refinery in Kralupy nad Vltavou and 5.4-million tpy refinery in Litvínov (OGJ Online, Dec. 5, 2023).
Orlen subsidiary Orlen Południe SA also operates two other refineries in Poland—at Trzebinia and Jedlicze, respectively—both of which specialize in manufacturing biofuel components, base oils, heating oils, and hydrotreated paraffin, and as well as in regeneration of spent oils.
