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Southeast Europe: Weekly rundown March 4 - 8

Southeast Europe: Weekly rundown March 4 - 8 KMGI Vega Refinery

SOFIA (Bulgaria), March 8 (SeeNews) - Energy was at the centre of the most interesting developments in Southeast Europe (SEE) this week, with KazMunayGas International investing some $230 million in a generation plant and filling stations in Romania, Gazprom starting to build a 200 MW gas-fired power plant in Serbia, and US-based electric battery manufacturer EnerSys closing its Bulgarian plant.

Following are these, and more of our top stories this week.



The board of the energy investment fund set up by KazMunayGas International and Romania's government has decided in principle to build a co-generation power plant on the Petromidia platform and develop a chain of filling stations, KMGI said on Wednesday

Around $230 million (203.5 million euro) will be attracted or earmarked for those projects through special purpose vehicles, KMGI (former Rompetrol Group) said in a statement.

The investment fund was created in October by KMGI and SAPE, the company managing the state-owned assets in Romania's energy sector.

"It was a remarkable day as within just 4 months after its establishment the Board of Directors of the Fund has approved two major investment projects for the amount of almost $230 million. It is a major step for the local energy sector, which is testament to the commitment, confidence and willingness of its shareholders to invest in and contribute to Romania’s economic growth," Romanian-Kazakh Energy Investment Fund general manager Iskander Abdibaitov said.

With an implementation period of four years, the co-generation plant will provide heating and hot water to the residents of Navodari, as well as electricity and technical steam for the Petromidia platform, which are required to support the petroleum production business.

At the same time, the power plant will play a part in stabilizing the generation and distribution of electricity in the Dobrogea region. The new facility will be built in cooperation with the Midia Power Plant (currently owned by Romania's energy ministry with 56.58% and KMGI with 43.42%) and will run on natural gas.

KMGI and SAPE also plan to develop a network of filling stations in Romania in the following five years. The chain will benefit from the supply of fuels produced by Rompetrol Rafinare at the Petromidia Navodari refinery.

The new filling stations, to be operated under the Rompetrol brand, will create more than 1,000 new jobs, with more than 5000 people being involved in various development stages and more than 1,200 commercial partners.

The Kazakh – Romanian fund is expected to reach $1 billion of investments over a period of seven years. KMGI owns 80% of the fund's shares, with the Romanian government holding the remainder.

In Romania, KMGI operates the Petromidia Navodari refinery – the largest unit of its sort, the Vega Ploiești refinery – the oldest refinery (1905) still in operation and the only producer of bitumen and hexane, as well as a vast network for the distribution of petroleum products.



Russian gas giant Gazprom said it has launched the construction of a 200 MW gas-fired combined cycle power plant in Serbia's Pancevo - the first of its kind in the Balkan country.

The project will be implemented jointly by Gazprom's subsidiary Gazprom Energoholding and Serbian oil and gas group NIS [BEL:NIIS], the Russian company said in a statement on Thursday.

The commissioning of the power plant is planned for 2020.

The heat generated by the TPP will serve the needs of the NIS's Pancevo oil refinery, while the electricity output will be sold both in Serbia and abroad, Gazprom said.

In October 2017, China's Shanghai Electric Group won a tender for turnkey construction of the TPP’s combined cycle power unit. The core equipment of the Pancevo TPP will include two Ansaldo Energia gas turbines and one steam turbine.



Bulgaria's Euroins Insurance Group (EIG), part of diversified group Eurohold Bulgaria [BUL:4EH], said on Thursday that it has agreed to acquire four units of Germany's ERGO based in three European countries.

ЕIG will acquire ERGO’s life and non-life subsidiaries in Romania and the Czech Republic, as well as a non-life insurer in Belarus, EIG said in a statement.

"The acquisition of ERGO's subsidiaries in Romania, the Czech Republic and Belarus perfectly suits our strategy to expand our presence in the CEE and CIS markets, which provide huge potential for growth, and at the same time to diversify our product portfolio," Jeroen van Leeuwen, Chief Operating Officer of EIG, was quoted as saying in the statement.

The four companies' combined premium income amounted to 72 million euro ($81.4 million) in 2017, according to EIG.

The deal is subject to regulatory approval.

Last year, EIG acquired the travel insurance business of ERGO in Ukraine - ERV Ukraine.

EIG operates in nine European countries and owns insurance subsidiaries in Bulgaria, Romania, North Macedonia, Ukraine and Georgia.



US-based electric battery manufacturer EnerSys said that its board of directors has approved a plan to shut down its facility in the Bulgarian city of Targovishte, which produces batteries for diesel-electric submarines.

"Management determined that future demand for batteries of diesel-electric submarines was not sufficient given the existing number of competitors in the market," EnerSys said in a statement on Wednesday.

"EnerSys plans to sell or transfer the plant and possibly the equipment to other parties if possible," it added

The company expects to incur a pre-tax charge of approximately $32 million (28.3 million euro), of which $22 million in asset write-offs and $10 million for severance, clean up and remediation related to the facility and contractual releases.

EnerSys' Bulgarian unit turned to a net profit of 2.35 million levs in 2017, from a net loss of 1.13 million levs in 2016, according to the latest available data from the commercial register. The company booked sales revenue of just over 21 million levs in both 2017 and 2016.