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The Warsaw Voice » Other » April 16, 2008
XV ECONOMIC FORUM IN TORUŃ
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Profitable Times for OLPP
April 16, 2008   
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Last year was the most important in the history of Operator Logistyczny Paliw Płynnych Sp. z o.o. (OLPP-Liquid Fuels Logistics Operator, previous name: Naftobazy Sp. z o.o.). The company developed rapidly, carrying out investment plans starting with the construction of over 240,000 cubic meters of new storage capacity. This was necessary to meet the growing consumption of fuels in Poland and to ensure sufficient capacity for producers and importers of petroleum products to store their stocks as well as mandatory reserves.

Tank investments

In late March 2008 OLPP could offer new storage capacity: a 32,000-cubic-meter tank was completed at the fuel depot in Nowa Wie¶ Wielka and the technical start-up of four 10,000-cubic-meter tanks began at the depot in Kawice. In the coming weeks, a total of 15 new tanks with overall capacity of over 170,000 cubic meters will be completed at OLPP's fuel depots in Dębogórze, Kawice, Rejowiec and Emilianów. Thanks to this, OLPP will be able to offer clients over 1.8 million cubic meters of storage capacity for petroleum products. In 2008 the company will focus on completing ongoing projects as soon as possible, and on overhaul and modernization of tank infrastructure so that it meets EU standards. Thanks to this, OLPP will upgrade its infrastructure as well as consolidate its position as a leader in the fuel storage market.

Waiting for pipelines

Developing the pipeline system is necessary to ensure Poland's energy security by diversifying fuel supplies and also to ensure third party access to infrastructure in accordance with the EU's rules.

OLPP is interested in completing the process of bringing elements of PERN (Oil Pipeline Operation Company) fuel logistics into the company. This would allow OLPP to become an integrator of the liquid fuel logistics system, providing a comprehensive service of transport, handling and storing of fuels. The takeover of product pipelines will also enable the national pipeline system to be developed, as the cheapest, safe and environmentally friendly means of transporting fuels. In a longer-term perspective, OLPP sees the necessity to build trans-border pipelines and get connected to neighboring countries' systems, which would be greatly important for Poland's energy security.

Underground storage

According to OLPP analyses, a sizable deficit of fuel storage capacity could appear in 2011 as a result of the planned reduction of emergency reserves of fuels in the form of crude oil to just 50 percent of all reserves, a move planned for that year.

To provide a systemic solution to the problem by a rapid increase of new storage capacity, OLPP has taken action to start using salt caverns as tanks. This safe, relatively cheap and environment-friendly method of storing liquid fuels, oil, natural gas or even chemicals, is used all over the world, but especially in the United States where all strategic reserves are stored in caverns, and also in France. In Poland, PKN Orlen uses the caverns of the Solino Inowrocław Salt Mines. It just so happens that a location perfect for such a cavern is next to the fuel depot in Dębogórze. This is the only OLPP depot connected to a marine pier allowing for both import and export of fuels.

Forecasts say that the market will be balanced if 600,000 cubic meters of storage capacity is built by the end of 2012. By expanding the caverns, another 1.2 million cubic meters of new capacity can be achieved in subsequent years.

Profits rise

These ambitious investment plans were made possible by the fact that the company's sales have kept growing year by year. In 2007, product sales stood at zl.276.6 million, compared to zl.232.2 million the year before. OLPP's profit is growing even more rapidly. Gross profit for 2007 was zl.119.1 million, with net profit at zl.95.7 million, whereas in 2006 the company reported zl.68.6 million gross profit and over zl.54.4 million net profit. Such high profits are the effect of higher-than-planned revenue from the sale of services and materials.

OLPP is a company that successfully carries out its ambitious investment plans. At the same time, it ensures all its customers equal access to comprehensive logistics services for handling and storage of petroleum products.
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