KREIF Starts Construction of New Cogeneration Plant at Petromidia
The Kazakh-Romanian Energy Investment Fund (KREIF) starts the construction of the cogeneration plant on the Petromidia platform, an investment that amounts around $148 million. The estimated deadline for the commissioning of the new plant is the end of July 2023.
“
It is an important step in consolidating and developing the energy sector in Romania. We start to build a new production capacity at the highest technological standards, which leads to energy efficiency and environmental protection. It supports the reduction of imports and the increase of energy exports in the region, but also the consolidation of electricity production and distribution in the Dobrogea region. At the same time, it will be able to use and transform the natural gas extracted from the Black Sea into finished products, with high value and which can be exported (extra energy, fuel production and other petroleum products),” declares Virgil Popescu, Minister of Energy.
Established in October 2018, KREIF is owned by KMG International and the Romanian State through the Administrare a Participatiilor in Energie (Energy Participation Management Company) – SAPE company. At the same time, the two shareholders – KMGI and the Romanian State through the Ministry of Energy are also present in such companies as Uzina Termoelectrica Midia and Rompetrol Rafinare – the operator of the Petromdia Navodari and Vega Ploiesti refineries, the single polymer producer in Romania.
The new unit for combined production of electricity and heat will operate on natural gas basis as the main fuel, the mix of necessary resources being provided in proportion of 25% of the technological process of the refinery and 75% of the national network.
Through the technical configuration (two Siemens SGT-750 turbines of high efficiency and performance and two heat recovery boilers), the new plant will generate approximately 80 MW of electricity – of which about 60-70 MW will fully cover the electricity needs of the Petromidia platform, technological steam of up to 180 tons/hour, plus the necessary hot water for the heating system of Navodari – up to 20 MWt/hour. The project will generate about $ 11 million in taxes paid to the state budget each year.
Through the programs of modernization and efficiency of the units and production flows within the Petromidia refinery, KMG International aims to reduce constantly the electricity consumption. Thus, the surplus generated by the new plant will be sold on the domestic market and will provide additional revenue for the investment vehicle (SPV) – Rompetrol Energy.
Rompetrol Energy is the majority owner of the Kazakh-Romanian Energy Investment Fund, together with Rominserv and the Uzina Termoelectrica Midia.
At the same time, the plant will allow a significant reduction in the price of electricity delivered to the Petromidia platform – by eliminating part of the regulatory tariffs (e.g., transmission and distribution tariffs) and the price of thermal energy delivered to the city of Navodari. It will also support the Group’s carbon reduction targets generated by production activities, and thus allow an annual reduction of about 290kt CO2 for electricity production and a saving of energy resources used of about 1.2 MWh.
“The start of the construction of the new plant reconfirms KMG International’s commitments to continue to be a strategic investor in Romania, to support the energy sector and the national economy, and what more to be an important supplier of petroleum products in the region. The new plant will contribute to the development of refining activities by improving processing costs, reducing the carbon impact and footprint from the industrial platform, and creating the necessary premises for new investments,” stated Beimbet Shayakhmetov, CEO of KMG International.
In August 2020, the Investment Fund selected Calik Enerji as the general contractor of the project (Engineering, Procurement and Construction), based on an extensive evaluation and selection process depending on the capability of the companies, which expressed their interest (similar projects carried out in the last 10 years – minimum 3 projects, the existence of ongoing projects, a solid financial situation, letters of recommendation, qualified staff, etc.), as well as the criteria and technical proposals, as well as their financial offers.
It is a brownfield type of investment, which will integrate the assets of Uzina Termoelectrica Midia, as well as its staff for the operation of the existing equipment and the new plant. Starting this year, a series of stages were carried out prior to the actual start of the project – land preparation, geotechnical study, obtaining/updating specific permits/authorizations for the demolition of old buildings, organization of the site and environment.
The project will also involve the performance of additional works to ensure the raw material, such as the construction of a new pipeline of approximately 4 km, an installation for compression, filtration, heating, and mixing, but also 2 gas measuring units (SRM). According to estimates, over 20% of the budget allocated to the project will be assigned to Romanian companies for various products/equipment and services/works.
The Kazakh-Romanian Energy Investment Fund was established in October 2018 by KMG International and the Societatea de Administrare a Participatiilor in Energie, its main and strategic objective being the development of energy projects in Romania.
Another important project of the Fund aims at developing a network of 84 fuel stations in Romania, which will sell exclusively car fuels produced by the Petromidia Navodari refinery. These fuel stations will ensure a consolidation of the profile market and fuel supply, supporting both an increase in revenues to local and central budgets, and the creation of over 1,000 new jobs, over 5,000 people involved in various stages of development (design, execution, construction) and over 1,200 business partners. The total value of the investment is estimated at about $120 million.
Currently, the network amounts 30 fuel stations, of which 10 units were completed and opened during last year.
Also in 2020, two other projects were approved, aiming at modernization of the Petromidia refinery, but also consolidation of the single polymer producer (the raw material for medical protection products such as sanitary and surgical masks FFP1 and FFP2, as well as medical accessories such as caps, coveralls, etc.).
The projects’ value amounts $43 million and consists of the construction of a dewaxing installation on the Petromidia platform, which will allow the refinery to improve the process of obtaining diesel fuels during winter and increase the production of special aviation fuel, as well as to increase by more than 30% the polymer production, by converting the high-density polyethylene (HDPE) installation into a polypropylene (PP) installation.
Currently the total amount of KREIF’s investments in energy projects is $311 million.
