December 20 (SeeNews) - Croatian oil and gas company INA [ZSE:INA] said it plans to invest over 4 billion kuna ($617 million/539 million euro) to revamp its Rijeka refinery in order to optimise its downstream business.
The investment programme approved by INA's management board as part of the 2019 business plan also envisages the transformation of loss-making Sisak refinery into an industrial site, the company said in a statement on Wednesday.
INA said it will launch its Downstream 2023 New Course programme in order to improve its refining and marketing business, which has so far generated an annual average loss of 1 billion kuna.
The programme is focused on ensuring sustainability and profitability of refining and marketing operations, as well as the whole company through changes of the current downstream business model, INA explained.
Investment in a Delayed Coker Unit (DCU) project in the Rijeka refinery, which includes reconstruction of existing facilities and a new port with closed petro-coke storage, will turn the Rijeka refinery into a top level European refinery.
"Total investments are worth more than 4 billion kuna, which would represent the single largest investment project in the history of the company," INA said.
The final investment decision regarding the DCU project is planned for 2019, if all the prerequisites for securing return on investment are met. The commissioning of the project should take place in 2023.
INA also said that the Sisak industrial site will remain a valuable part of INA’s operations, being a major employer and investor.
"The alternatives would include the development of bio-component refining and petrochemical production conditional to viable business case, and positive development of EU and Croatian legislation. It would also include a modern logistics hub, bitumen, renewables, lubricant production or other sustainable and economically viable operations," INA said.
After all necessary decisions have been made, the programme is expected to launch next year. INA expects its average annual EBITDA to increase by more than 1 billion kuna after 2023, when the programme will be completed.
INA recorded a consolidated net profit of 1.056 billion kuna in the first nine months of 2018, up 9% on the year, as net sales revenue rose by 21% to 16.227 billion kuna.
Hungary's MOL is the biggest shareholder in INA with a 49.08% stake. The Croatian government owns 44.84%, with the remaining6.08% held by institutional and private investors.
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