MOL Looking at Propylene Oxide
MOL to focus on refining efficiency, petrochemical diversification
MOL Group’s integrated business model will continue to provide stable and robust profitability for the next 10-15 years. In addition, MOL has earmarked a total of at least around $2 B as strategic capex for 2017-2021 related to the implementation of the new long-term strategy. This is above the annual organic capex expected at approximately $1 B.
Efficient and flexible refining assets. In refining MOL will continue to focus on improving efficiency and implementing the initiatives of the Next Downstream Program (2015-2017), which is set to deliver $500-MM EBITDA improvement. As part of its long term strategy MOL targets a gradual increase of the share of valuable non-motor fuel products to above 50% by 2030 from below 30% currently. MOL intends to increase the feedstock for its petrochemical plants, whilst also taking advantage of the growing demand for such profitable products as jet fuel, lubricants and base oils. MOL will also expand its market share in LPG. MOL plans to invest around $80 MM -$130 MM into its refineries in Hungary and Slovakia to increase the flexibility of propylene and lubricants production. In order to process the most profitable crude and to match the demand for its products, MOL intends to increase the seaborne crude intake to its landlocked refineries from the current 10% to 33% by 2030, whilst also increasing the crude basket to above 50 grades.
Transforming petrochemicals. MOL has earmarked up to $1.9 B until 2021 to develop its petrochemicals business. The yield improvement of propylene and investment into attractive propylene derivatives will be the main direction for the next five years. In order to allow further diversification in the propylene value chain MOL Group will invest more than $500 MM into its steam crackers in Hungary and Slovakia. MOL Group will also invest in propylene oxide based polyols, a high-value product applied in the automotive industry, packaging and furniture manufacturing. MOL Group would become the sole fully integrated supplier in CEE, the region which is driving the European supply growth. Moreover additional investments are being planned for another possible product entry.
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