Energy 1 June, 2023 7:35 am   
COMMENTS: Joanna Słowińska

Polish Briefing: Gaz-System eyes Orlen’s storage I Will Orlen take over Azoty? I Tauron wants NABE

Kosakowo-309×205 Gas storage facility in Kosaków, Poland. Picture by PGNiG

Gaz-System is eyeing Orlen’s gas storage

Gas Storage Poland’s gas storage facilities owned by the Orlen Group are to be placed under the supervision of the TSO Gaz-System. The company may also buy them, but for now it is watching how the situation will develop.

“We know that Orlen is going to sell Gas Storage Poland and we are watching this process,” said Andrzej Kensbok, Vice President of Gaz-System during the Supplier’s Day on May 31.

The acquisition of PGNiG by PKN Orlen means that the group owns, among other things, the company that manages some of the gas storage facilities in Poland, i.e. Gas Storage Poland.

GSP owns facilities Husów, Wierzchowice, Strachocina, Swarzów, Brzeźnica, Mogilno and Kosakowo. Gaz-System is to become the operator, but the ownership remains in the hands of Orlen. A sale is also being considered, but according to information obtained by there is no resolution in this matter.

Wojciech Jakóbik / Jedrzej Stachura

Business Insider: Orlen may take over Azoty

Grupa Azoty has recorded half a billion zloty loss after the first quater of 2023. The situation of the company is serious enough for the State Assets Ministry to implement a rescue plan. It is possible that in the coming days Orlen will announce the start of talks with the Group on the purchase of the factory in Puławy.

Disastrous financial results, shut down installations, anxiety among the crew and a notification to the prosecutor’s office about the possibility of the management board acting to the detriment of the company — this is the situation at the nitrogen plant in Puławy, the largest fertilizer plant in Poland, owned by Grupa Azoty.

The difficult situation of the company is the result of high prices for raw materials, including natural gas, which is key in the production of fertilizers. PGNiG, currently owned by Orlen, has been the main provider of gas for Azoty.

Orlen is to rescue the chemical group. In the coming days the fuel giant may announce the start of negotiations on taking over the company from Puławy. However, this is a scenario that will only pay off for Azoty in the short term.

This year has not started well for Grupa Azoty. In the first quarter, which is usually the best time for fertilizer producers, the chemical company recorded a net loss of PLN 555 million. A year earlier, it had 882 million zlotys of net profit. The group includes four large fertilizer companies located in Tarnów (where the group headquarters is located), Police, Kędzierzyn-Koźle and Puławy. The latter-Grupa Azoty Puławy-recorded the biggest loss, reaching PLN 282 million.

Considering these circumstances, the Ministry of State Assets is analyzing  how to save the company. The main scenario now is the sale of Puławy to Orlen, which already has a fertilizer company-Anwil. The Puls Biznesu daily was first to report about this. Our sources confirm that the process is already underway, and the announcement of the start of official negotiations between Orlen and Grupa Azoty may appear in the coming days.

Grupa Azoty ranks second in the EU in the production of nitrogen and multicomponent fertilizers, while products such as melamine, caprolactam, polyamide, Oxo alcohols and titanium dioxide also have a strong position in the chemical sector, finding application in many industries. Its consolidated sales revenues reached PLN 24.66 billion in 2022.

In total, the Azoty Group employs approx. 15,000 employees.

Business Insider / Jacek Perzyński

Tauron hopes that NABE will be established as soon as possible

“Tauron is a huge supporter of the NABE project. We hope that this process, in accordance with the statements of the Prime Minister, will be launched as soon as possible,” said Paweł Szczeszek, President of the Tauron Group during a videoconference.

“We are currently finalizing the work on NABE. We have done all the internal work to prepare the assets for transfer. We have completed due diligence reports, valuations of these assets are being finalized, and work is underway to provide materials for banks,” said Tauron VP Krzysztof Surma.

“We hope that in the next few weeks we will complete the work related to valuations, the work related to obtaining the consent of the credit committees will be completed. The work related to the negotiation of the SPA agreement is being finalized. So we hope that in the coming weeks we will be able to sign at least the first agreement in the field of asset transfer, probably containing suspensive conditions,” Surma added.

As he noted, with regard to financing, we are talking about an intragroup financing transfer model to NABE and its possible repayment.

The President of Tauron, Paweł Szczeszek, pointed out that there is a political will to carry out the process of allocating coal generation assets to NABE and, according to the announcements, the project should be launched soon.

It is worth noting that the agency was supposed to be established by the end of March 2023, but the date of establishment has been repeatedly postponed. Currently, it is said that it launch at the turn of June and July 2023. The headquarters of the agency will be located in Bełchatów.

The National Energy Security Agency (NABE) is to operate in the form of a holding company, which will be formed around the company PGE Górnictwo i Energetyka Konwencjonalna. The goal is to concentrate coal assets separated from four energy companies under the control of the State Treasury: PGE, Tauron, Enea and Energa. This will ensure the security of energy supply, while allowing these companies to grow without the financing problems caused by having coal in the portfolio.

Tauron Group / Jacek Perzyński