The contract to supply 2.4 million tonnes of crude oil per year, which constitutes approximately 20% of PKN Orlen’s annual demand, is effective as of July 1, 2007 and may be extended by another two or more years.
PKN Orlen said that the agreement signifies that the company has achieved its planned model supply structure, which provides for acquiring approximately 82% of crude oil in term contracts. The company added that the contract is an important tool in ensuring diversified supplies to PKN Orlen and will contribute to improving energy security.
PKN Orlen said that Petrotrade is a reliable supplier that has previously delivered similar volumes to the company in short-term spot contracts. However, if monthly volumes fall below 90% of the contracted amount, or if there is a delay in delivery, a condition of the agreement requires the payment of a penalty that could total approximately PLN1.2 million per month.
In addition, payment of the penalty does not exclude PKN Orlen’s right to claim compensation exceeding the value of the penalties.
