Polish daily Gazeta Prawna reports that Lotos Group is going cancel an investment in a plant for gasification of residuals from petroleum processing. The construction of the facility would be unprofitable, Prawna said, citing an anonymous person close to company's management. The company will officially announce the changes in its investment plans next month, Prawna reports.
Our view: Gasification of the heavy residuum was planned to supply the IGCC power plant of Lotos. In the current market environment (strong demand for bitumen) the gasification of the heavy residuum became less profitable, which might drive the management to postpone or cancel the project. We consider the news as neutral. The major parts of the project, including the mild hydrocracker and the extension of refining capacity are on their way.