Orlen’s strategy
“Energy security, modernization, environmental goals and development of the offer are Orlen’s new strategy. +Energy of tomorrow starts today+ is the most ambitious and largest development investment program in the history of the company,” Orlen emphasized, announcing the strategy until 2035 on Thursday. The priorities include among others “decarbonization of assets and energy transformation understood as conducting sustainable activities and building a sustainable portfolio of assets.”
As stated in the assumptions of the strategy, it is intended to ensure a stable growth rate of operating profit LIFO EBITDA from PLN 53 to 58 billion in 2035. Cumulative operating profit LIFO EBITDA in the years 2025-2035 it is expected to range from PLN 500 to 550 billion. In turn, cumulative investment outlays, including capital investments in the years 2025-2035, may range from PLN 350 to 380 billion, of which PLN 270 to 290 billion are flexible expenditure, enabling the company to actively manage the investment budget.
Energy independence
Orlen declared that its goal is, among others, increasing gas production, building four offshore wind farms, large-scale energy storage facilities and at least two small nuclear power plants.
“We will contribute to the construction energy independence Polish and regional economy. We will be safe, competitive and modern. We will invest up to PLN 380 billion in this. This is the largest development program in the history of Polish energy,” said Orlen’s president, Ireneusz Fąfara, quoted in the release. As he said, the strategy until 2035 “is ambitious and responsible.”
“This is our commitment to our customers, including all Poles. There is a lot of catching up to do in our industry. This is a decade of last chance for the energy sector, so we are accelerating,” said Orlen’s president. He added that at the same time, the concern is intensifying the integration of the group companies. “We introduce and consolidate corporate governance rules and modern, transparent management principles. We optimize projects and processes to gradually increase the value of the ORLEN Group for our shareholders,” he pointed out.
Referring to the priorities planned as part of the strategy, Orlen announced that “the company’s activities will make energy cheaper than it would be without the planned investments.”
End of energy production from coal
By the end of 2030, Orlen plans to end the production of electricity from coal and to abandon the use of coal in heating by 2035, the company announced on Thursday. It was indicated that this would allow, among others, reduce carbon dioxide emissions in the Energy segment by 55%.
The company announced that it is planned to end the production of electricity from coal by the end of 2030, and by 2035 it will fully phase out the production of energy from coal assets in heating. “As a result, the Company maintains its goal of achieving emission neutrality in 2050 (…) in accordance with the Paris Agreement,” the company said in its announcement.
The company from Płock also announced that by 2035, compared to the base year of 2019, it intends to reduce carbon dioxide emissions in absolute terms by 25%. in the Upstream & Supply and Downstream segments to the level of 12.5 million tons of CO2e, reduce the intensity of carbon dioxide emissions in the Energy segment by 55%. to the level of 170 kg CO2e/MWh and reduce the carbon dioxide emission intensity (NCI) by 15%, to the level of 67 g CO2e/MJ.
Orlen dividend for 2025
The level of guaranteed dividend in 2025 is to be increased from PLN 4.3 to PLN 4.5 per share, Orlen announced, publishing its strategy until 2035 on Thursday. Informing about its strategic plans, the company announced that four offshore wind farms and at least two small nuclear power plants.
The new strategy of the Orlen Group will allow – as the company declared – to share profits with shareholders “through a stable increase in dividends”. “The level of guaranteed dividend in 2025 will be increased from PLN 4.3 to PLN 4.5 per share,” it was reported.
The company reminded that the progressive dividend policy assumes an annual increase in the guaranteed dividend by PLN 0.15 per share. “The management board will be able to recommend the payment of a higher dividend, up to 25% of cash flows from operating activities in a given year, less financing costs,” Orlen noted.
The role of gas
In the assumptions of its strategy until 2035, the company announced that four offshore wind farms and at least two small nuclear power plants would be built.
According to Orlen, the company’s recycling processing capacity will increase within a decade from the current 35,000. tons up to 250 thousand tone. “Products made from renewable raw materials and in a closed loop will have a 10% share in the sales of all petrochemicals in 2035,” the company announced.
In its new strategy, Orlen assumes a key role for gas as a transition fuel, the company announced on Thursday. She added that she planned to increase its production from 9.1 to 12 billion cubic meters. annually and an increase in LNG contracting from 4.8 to 15 billion cubic meters. annually.
In its strategy until 2035 announced on Thursday, Orlen announced support for the decarbonization of the energy sector through investments in renewable energy sources, energy storage, SMR and CCGT (steam and gas power units – PAP). The company emphasized the key role of gas as a transition fuel; also intends to increase natural gas production from 9.1 to 12 billion cubic meters. annually. It also wants to ensure a flexible portfolio of LNG contracts and an increase in contracts from 4.8 to 15 billion cubic meters. LNG per year.
According to Orlen, it plans to expand the installed capacity in gas-fired power plants and combined heat and power plants (CCGT) from 1.8 to 4.3 GW, as well as introduce to the market and implement the small modular reactor (SMR) technology with an installed capacity of 0.6 GW.
The company will allocate over PLN 20 billion for gas distribution networks and PLN 40 billion for electricity distribution networks.
In the strategy, Orlen also assumed an increase in the installed capacity in renewable energy sources from 1.3 to 12.8 GW through the development of wind energy and photovoltaics, including in partnerships – the development of up to 1.4 GW of the installed capacity of energy storage facilities (BESS).
In order to reduce emissions, Orlen also plans to build capacity for capture, transport and storage services of up to 4 million tons of CO2 per year. (PAP)
