In the crude oil refining business, modernization is one of the key factors allowing to considerably improve its performance results, cope with severe competitive pressure, and secure its business perspective. It is essential for adapting to EU climate policy, including the European Green Deal and the Paris Agreement, and for gradually reducing greenhouse gas emissions in pursuit of climate neutrality by 2050. Increasingly stringent requirements are driving the need to transform infrastructure, implement advanced technologies, diversify energy sources, and expand the use of renewable energy. There are also many invisible elements – innovations are not only about new equipment, but also about new process conditions, new catalysts, choosing the right direction for the renewal process, and much more. This section presents the technological development vision of AB ORLEN Lietuva.

In line with the ORLEN Group’s 2035 strategy, the Company is focusing on two key technological development directions highlighted in the strategy:

1.     Downstream

1.1  Refining

·         Conventional refinery projects

·         Decarbonization

1.2  Chemical recycling

1.3  Production of synthetic fuels and green hydrogen

1.4  Production of biofuels

2.     Energy

2.1. Renewables and their development

Downstream

​​​Refining

Conventional refinery projects

Conventional crude oil refining processes aim to increase the production of market‑demanded products, as well as to develop new high‑demand products and implement projects that enhance the refinery’s feedstock flexibility. This area also includes other projects for ensuring business continuity in two aspects: the possibility to sell products, taking into account future changes in quality parameters, and the possibility to continue operations, e.g. obtaining Integrated Pollution Prevention Control (IPPC) Permit with account to future pollution requirements.

At present, the Company has begun analyzing polymer‑modified bitumen production technology with the aim of producing and supplying additional grades of polymer‑modified bitumen to the market. A project to improve crude oil dosing at the refinery is also underway, along with the modernization of a buoy at the Būtinge Crude Oil Terminal.

Besides the optimization of feedstock, production mode and production output, the greatest impact on the implementation of this area will be achieved through implementation of the Bottom of the Barrel Project by building a new residue hydrocracking unit. The current residue reduction process produces a considerable amount of heavy fraction (fuel oil), which has a negative margin, declining global demand and value, while the quality requirements are getting stricter. For these reasons, the crude oil refinery must minimize the production of high-sulpfur fuel oil in order to remain competitive. For AB ORLEN Lietuva, such a possibility will present itself after constructing and commissioning a new residue hydrocracking unit. It is expected that the implementation of this project will significantly increase the yield of light petroleum products. Products from the residue hydrocracking unit will further be processed at the Refinery's units; all the existing units will continue in operation. The new residue hydrocracking unit will significantly increase the complexity of the Refinery, bring the Refinery closer to the world's best refineries, and increase the Company's financial results. With this deeper conversion technology, ORLEN Lietuva will be able to considerably improve its performance results, cope with severe competitive pressure, and secure its business perspectives. Construction of the new unit is crucial not only to the Refinery of ORLEN Lietuva, but to the entire economy of the region and energy security. Over 1 billion euros will be invested in the construction of the new residue hydrocracking unit.

Decarbonization

AB ORLEN Lietuva is taking part in a benchmarking study of oil refineries since 2006. Energy consumption is one of the areas analyzed in the study. Over the past twenty years, energy consumption has been reduced by more than 30% through organizational measures and the implementation of relatively small-scale investments and short payback projects. Current energy consumption is lower than the industry average, placing ORLEN Lietuva in the top quartile in the region. Despite considerable progress, decreasing energy consumption further is crucial not only for reducing energy costs but also for minimizing the environmental impact of current activities.

This area includes projects for heat exchange efficiency, process electrification, low-potential heat utilization, and others.

Chemical recycling

In the European Parliament and Council Directive (EU) 2018/850, which amends Directive 1999/31/EC on the landfill of waste, a target was set to reduce the amount of municipal solid waste disposed of in landfills to 10% or less of the total amount of municipal waste generated (by weight) by 2035. The Company is currently analyzing various waste chemical recycling technologies, such as waste pyrolysis, waste gasification, and others with the aim of processing plastics and other waste on an industrial scale using chemical methods. This area is quite new for the Company, but it is viewed as having significant development potential.

Production of synthetic fuels and green hydrogen

This area is recent in the entire world, as some markets for synthetic products are still in development and the first pilot units are emerging. The direction is also crucial for our Company as our Company moves in the direction of transformation, producing energy from renewable energy sources while making use of the existing infrastructure and the human know-how. European Union regulation (ReFuelEU Aviation) obliges aviation fuel suppliers to blend synthetic fuels into the fuel they place on the market: starting from 1.2% in 2030, with the share increasing over time, reaching at least 35% synthetic aviation fuel in the fuel supplied by 2050.

This area, firstly, includes production of green hydrogen by electrolysis, and other synthetic fuel, such as aviation fuel, methanol and ammonia.

Production of biofuels

This area is also crucial as our Company moves in the direction of transformation, especially since the technologies are sufficiently mature and the products are widely used. European Union regulation (ReFuelEU Aviation) obliges aviation fuel suppliers to blend biofuels into the fuel they place on the market: starting from 2% in 2025, with this share gradually increasing and ensuring that at least 70% of the fuel supplied in 2050 consists of sustainable aviation fuels (SAF).

This area includes production of biofuel such as hydrotreated vegetable oil and sustainable aviation fuels from the corresponding biomass category. Possible technologies are being analyzed. Today, the Company is already completing the project for SAF blending infrastructure.

Energy

Renewables and their development

Additional income from the new residue hydrocracking unit will be specifically used for further decarbonization of the Company and development of renewable resources in order to achieve the goals set out in the ORLEN 2035 strategy. This area firstly includes generating electricity from solar and wind power plants. This is crucial to the production of green hydrogen and synthetic fuel, also biofuel. Access to cheap, stable renewable energy supplies (feedstock for future products) will be a key competitive advantage and managed risk in the transition to a low-carbon business sector.

The installation of the 42.2 MW photovoltaic plant will be completed in 2026. Wind measurements are also currently being carried out to support the development of a wind energy project. In the future, various potential development directions for ORLEN Lietuva will be analyzed and evaluated with the aim of reducing environmental impact, including battery development technologies. The Company will seek to align its energy consumption with generation from these energy sources.​

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