MOL Group Downstream
MOL Group’s Downstream division consists of different business activities that are part of an integrated value chain. This value chain turns crude oil into a range of refined products, which are moved and marketed for household, industrial and transport use. The products include, among others, gasoline, diesel, heating oil, aviation fuel, lubricants, bitumen, sulphur and liquefied petroleum gas (LPG). In addition, the company produces and sells petrochemicals worldwide and holds a leading position in the petrochemical sector in the Central Eastern Europe region.
2 petrochemical units
- In 2022 Downstream generated a HUF 848.4 bn (USD 2,240mn) Clean CCS EBITDA, which is 88% higher than the previous year’s performance. The exceptional result was driven by the performance of the refining and marketing (R&M) segment, which was driven by all-time highs in the different external environment factors contributing to its performance. The R&M segment delivered more than 90% of Downstream Clean CCS EBITDA, despite extra taxes and government measures. The petrochemical segment fell below the base level of performance, facing a stable external environment and unprecedented high energy prices.
- After the outbreak of the war, MOL Group accelerated its crude diversification programme and started a detailed analysis and a careful planning process to find solution for the significant technical, transportation, storage, and commercial limitations related to the replacement of REB crude oil. The initiation of the relevant projects started in 2022, following by the appropriate decision to mandate the relevant investments and modernisation processes.
- In November 2022, as part of preparations for the period when sanctions on the export of fuels made from Russian crude oil are [expected to be] in force, a new alternative crude oil, Arab light, was tested successfully in the Slovnaft refinery. This represented the reaching of an important milestone in ensuring further supply security for the region.
- Regarding ongoing transformational projects, construction activities for the flagship Polyol Project of the Downstream Segment came close to completion by the end of 2022, with the focus of the project management teams shifting towards the complex sequence of commissioning activities. Trial production shall start in multiple steps in the second half of 2023. The start-up sequence shall be optimised taking into consideration the guarantee testing of units and the market acceptance time of the various products. In case of Rijeka Refinery Upgrade Project the overall progress reached 70%, with related engineering and procurement activities, mechanical completion is expected in H2 2024.
- In line with the MOL Group’s sustainability targets, a green hydrogen project in the Danube Refinery entered the execution phase, while several new energy efficiency and CO2 reduction initiatives were developed. In line with its strategic objectives, the execution of major projects continued, such as the expansion of production capacities for maleic anhydride in the Danube refinery and of polypropylene production in Slovnaft’s Bratislava refinery, construction of the new Olefins Conversion Technology (OCT) Unit while the first phase of life-time extension programme for the Steam Cracker Unit in the MOL Petrochemicals' complex has been completed successfully in Tiszaújváros, Hungary.
- In 2022 MOL Group purchased and blended ca. 650kt of biofuels (bioethanol and biodiesel) in 8 countries and continued its efforts to prepare for increasing renewable share obligations in the transport segment. After the successful introduction of new components and technologies in the past years MOL started to use bio-propane in Autogas (LPG) from own production in Hungary in 2022.
- Most of the used biofuels are still biodiesel and bioethanol where the share of advanced and waste-based components in the feedstock portfolio is gradually increasing, leading to an overall better CO2 saving performance. A key contributor of the improvement of the CO2 footprint is a long-term supply contract with a Hungarian biodiesel producer about 40 kt biodiesel with high (ca. 80%) GHG saving.
In 2022, Downstream R&D continued its activities and projects across three main product fields: Polyol Polyolefin, and Refining. R&D has a vital role in the Polyol Project by continuing the development of product recipes for the upcoming start-up of production. We extended the polyurethane application development know-how to ensure the necessary support for MOL Group’s future customers for polyols. Our Polyol Technical Service team has already visited potential customers to prepare the ground for the market entry. In the polyolefin area, several new product recipes were developed to address the increasing demand of customers for more sustainable plastic recycling and compounding solutions, as well as in the field of virgin polyethylene/polypropylene for new application segments. Two advanced feedstocks for refinery diesel co-processing were successfully tested in MOL’s Danube Refinery. To meet the future demand of low carbon fuels and to accelerate the conversion to circular economy, additional small-scale lab reactor tests were successfully completed with increased bio-feedstock/waste ratio.
MOL Group entered into a strategic partnership with Swiss trading group Meraxis in September 2020. Under the agreement, Meraxis supplies MOL Group with post-consumer and post-industrial recycled feedstock to be converted into new Compounds, offering recycled plastic and virgin resin full-suite compounded solutions. In the first stage of growth, these are planned to be produced at Aurora Kunstoffe’s facility.
MOL Group acquired ReMat Zrt., a Hungarian market leading plastics recycling company using communal and industrial waste for creating regranules, the transaction was closed at the end of March 2022. The recycler has 2 production plants in Hungary (Tiszaújváros and Rakamaz) and a logistics hub in Bratislava, Slovakia. The annual plastic waste consumption is ~ 25 KT, the company main product line is recycled LDPE, LLDPE.
OUTLOOK FOR 2022-2025
- Working towards profitable and technically feasible solutions to converge towards the 2030 vision of 50-50% fuel / non-fuel ratio and deepen its value chain in chemicals.
- Downstream aims to contribute to MOL Group EBITDA generation with USD 1.2+ mn by 2025.
- Focus on further efficiency improvement and implementation of transformational projects.
- The focus of INA Refining and Marketing is to further improve the competitiveness of Rijeka Refinery by maximization of high-value products share through the implementation of the Delayed Coker Unit but also the transformation of the Sisak site into a direction of sustainable energy sources
- Besides direct financial impact actions targeting improving HSE performance and further enhancement of Customer Satisfaction are also in the focus.