ORLEN Signs Contract with Equinor for Crude Oil Supply

ORLEN SA said it has signed a contract with Equinor for the supply of more than 6 million metric tons of crude oil from the Johan Sverdrup field on the Norwegian Continental Shelf.

The contracted volume will cover about 15 percent of the ORLEN Group’s annual oil demand, the Polish energy company said in a news release, adding that deliveries under the contract will begin in September.

Financial terms of the contract were not disclosed.

The one-year contract provides for deliveries of crude oil from the Norwegian port of Mongstad. Shipments may be directed to refineries in Poland as well as to Lithuania and the Czech Republic, according to the release.

“We are strengthening the energy security of Poland and the region as a whole. We have fully eliminated Russian crude from all our refineries, which was made possible through effective diversification of supply sources,” ORLEN President and CEO Ireneusz Fafara said.

“The next step in this process is the first long-term contract with Equinor, giving us access to top-quality crude with high production efficiency. Johan Sverdrup is one of the largest fields in the world and accounts for one-third of Norway’s total oil production. Importantly, the production activities involve significantly reduced CO2 [carbon dioxide] emissions as the oil platforms are powered by electricity from shore, largely from renewables. We consistently focus on alternative sources of supply, as they are the foundation of stable production and a guarantee of energy security,” Fafara added.

“I am very pleased that we are now expanding our relationship with ORLEN to also include supplies of crude oil from the Johan Sverdrup field in Norway,” Irene Rummelhoff, EVP for marketing, midstream and processing at Equinor, said. “We are building on a long-term energy partnership with ORLEN which already includes production of oil and gas on the Norwegian Continental Shelf, a 10-year agreement for supplies of natural gas to Poland and collaboration on low-carbon solutions like carbon capture and storage. This agreement contributes to energy security in Poland, while we at the same time are working together to reduce greenhouse gas emissions”.

Production Boost at Ormen Lange Field

Last week, ORLEN Upstream Norway said it completed the third phase of development of the Ormen Lange field in the Norwegian Sea along with its partners. ORLEN said it expects its share of gas from Ormen Lange to increase by approximately 0.5 billion cubic meters per year during the peak output period.

The third phase of Ormen Lange’s development involved installing four subsea gas compressors to compensate for the pressure drop in the deposit resulting in a gradual reduction in production. The asset partners chose seabed installation instead of platform installation, ORLEN said in a separate statement.

“Ormen Lange is the second-largest gas field on the Norwegian Continental Shelf and a key asset in ORLEN Group’s upstream portfolio. The third phase of its development will increase our annual production from the field to 1.5 billion cubic meters, strengthening ORLEN’s position in Norway. The project reflects our commitment to responsible upstream operations. It was carefully planned and executed to capitalize on opportunities to avoid carbon emissions while optimizing the recovery of non-renewable natural resources. Thanks to excellent cooperation with partners and subcontractors, we completed the project on time and within budget,” said Ireneusz Fąfara, President of the Management Board of ORLEN.

Ormen Lange, located in the Norwegian Sea, was discovered in 1997 with resources estimated at 330 billion cubic meters of gas. ORLEN Upstream Norway holds a 14 percent stake, while Petoro holds 36.5 percent, Equinor Energy holds 25.4 percent, Norske Shell holds 17.8 percent as the asset operator, and Vår Energi holds 6.3 percent.

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