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KMGI-Romania fund to invest $43 mln at Petromidia Navodari refinery

KMGI-Romania fund to invest $43 mln at Petromidia Navodari refinery Rompetrol Rafinare - Petromidia refinery

BUCHAREST (Romania), March 31 (SeeNews) - The Romanian-Kazakh Energy Investment Fund said on Tuesday it has approved two new  investment projects worth a total $43 million (39.1 million euro) at the Petromidia Navodari refinery in Romania.

These projects will create synergies to the production processes of the refinery, the Romanian-Kazakh Energy Investment Fund (FIEKR) set up by KazMunayGas International (KMGI) and Romania's government said in a press release.

KMGI operates Petromidia Navodari and Vega Ploiesti oil refineries in Romania through Rompetrol Rafinare [BSE:RRC]. FIEKR was established in October 2018 by KMGI and SAPE, the company managing state-owned assets in Romania's energy sector.

FIEKR continues its investment plan for development of energy projects, which will create new jobs, budget contributions, state-of-the-art technological input and will also support the local economy, FIEKR management committee chairman Iskander Abdibaitov said.

At the same time, the investment plan will ensure a return level around 11% for the two shareholders of the Fund - KMGI and SAPE, Abdibaitov added.

The first project envisages the construction of a dewaxing plant on Petromidia platform, which will enable the refinery to significantly improve the process of obtaining diesel fuels in wintertime. At the same time, the integration of the new dewaxing plant into the technological flow of the refinery will also allow to increase production of aviation jet fuel, leading to the strengthening of local energy security.

The impact of the dewaxing plant will also be reflected in a rise in Rompetrol Rafinare's contribution to Romania's state budget.

With an estimated completion time in September 2022, the project has an investment value of about $35 million, the direct contribution of the fund being about 30%. The difference will be drawn from local and/or international financial sources.

The second project is intended to finance the consolidation and increase by more than 30% the production of polymers within the petrochemical division of the Petromidia refinery, the sole producer in Romania in this field.

The project aims to convert the high-density polyethylene (HDPE) plant into a  polypropylene plant (PP). The annual  polypropylene production capacity will increase from 90,000 tonnes at present to 120,000 tonnes by 2022.

The conversion will enable the consolidation of the jobs for 75 employees and increase by about $500,000 the annual contribution of Rompetrol Rafinare to the state budget.

The $8 million investment project is expected to be completed by June 2021, and will be fully financed from the Fund's own sources.

Rompetrol Rafinare's shares traded 9.46% lower at 0.0335 lei as at 1242 CET on Tuesday on the Bucharest Stock Exchange. 

($ = 0.9115 euro)