WARSAW, Nov 5 (Reuters) - Polish oil and gas company

Orlen ( PSKOF ) said on Tuesday its Olefins petrochemicals

project will not generate positive cashflow in future as it

again wrote down the value of the flagship investment started by

the group's former management.

According to its preliminary third quarter earnings

published on Tuesday, Orlen ( PSKOF ) wrote down 912 million zlotys ($228

million) of the value of its petrochemical business.

The project has already seen other investment writedowns and

Orlen ( PSKOF ) has pledged to decide on its future before the end of this

year.

It also announced a writedown of the value of its Lithuanian

refinery amid delays and cost overruns of the project to boost

the refining products yield.

The petrochemicals business writedown resulted from adverse

economic conditions and third-quarter spending on the Olefins

project, due to which, according to current estimates, "the

assets that are to be created will not generate positive cash

flows in the future", Orlen ( PSKOF ) said.

The statement highlights the dilemma Orlen's ( PSKOF ) management

faces as it nears a decision on the investment which besides the

writedowns, has been hit by soaring costs and downgraded

efficiency estimates, analysts said.

Orlen ( PSKOF ) new CEO Ireneusz Fafara called the project a "trap" in

August and said the refiner faced the choices of closing it and

paying the penalties, optimizing the investment or continuing it

amid adverse economic conditions.

"The main dilemma of this management board, is what to do

next, should we stop this project and assume that all the

expenditure incurred is wasted and each additional zloty spent

only increases its negative net project value? Or is it worth

finishing?," said Kamil Kliszcz, an analyst at mBank brokerage.

"This write-off alone does not determine this."

The impairment does not necessarily mean the project has no

future, Erste Group analyst Tamas Pletser said.

"Definitely it's not easy to decide on this because they

have to choose between a bad and a worse decision," Pletser

said.

($1 = 3.9965 zlotys)

(Reporting by Marek Strzelecki; Editing by Emelia

Sithole-Matarise)