GDANSK/WARSAW, Dec 11 (Reuters) - Orlen, Poland's largest gas and oil company, scaled back its plans for the Olefins petrochemical project on Wednesday, calling the investment "misguided" and saying it expects to lower its estimated cost by as much as a third.
The newly defined framework called "New Chemistry" was estimated to cost 34 billion zlotys ($8.40 billion) compared to a range of 45 billion zlotys to 51 billion zlotys for the earlier project, Orlen said in a statement.
The production of olefins, a chemical compound after which the original project was named, would not start until 2030 at the earliest, it added.
The announcement ends months of debate on the future of the delayed investment project as the global petrochemical industry grapples with the biggest crisis in decades amid low prices and overcapacity.
Orlen began building the plant in 2021 and had spent 12.6 billion zlotys as of the end of September. It also took several writedowns due to delays.
State Assets Minister Jakub Jaworowski said last month that a state audit estimated the company had lost about 5 billion zlotys on the project.
Orlen said it would hold talks with contractors in the coming months to lay out a new timetable for the project, and would publish the schedule and a new budget by the end of September 2025.
Olefins was envisaged as the biggest petrochemical project in Europe in years, delivering plastics ranging from bags and bottles to pipes and containers.
Completion was initially planned for 2024, but was delayed until at least 2030. The project's costs more than tripled due to poor planning, the company said last month.
Orlen hired consultants EY and Bain to make recommendations on the project's future, and in November decided it would not complete the project in the shape planned by the previous management.
The state-controlled company's management has been gradually replaced since a change in government in elections last year.
($1 = 4.0448 zlotys)
($1 = 4.0630 zlotys)
Reporting by Mateusz Rabiega and Marek Strzelecki; editing by Jason Neely and Kate Mayberry
Source: Reuters