Oil & Gas

Two New Projects Approved by the Kazakh-Romanian Energy Investment Fund

The Kazakh-Romanian Energy Investment Fund (FIEKR) has recently approved two new investment projects in total amount of USD 43 million related to the Romanian energy sector. These projects will create synergies to the production processes of the Petromidia Navodari refinery (part of the company Rompetrol Rafinare) and economic added value for both companies.

“The Kazakh-Romanian Energy Investment Fund continues its investment plan for the development of energy projects, which will create new jobs, budget contributions, ‘state of the art’ technological input, but also with an impact on supporting the local economy (services, products, etc.). At the same time, it will ensure a rentability level around 11% for the two shareholders of the Fund – KMG International and Societatea de Administrare a Participatiilor in Energie”, states Iskander Abdibaitov, Chairman of the Management Committee of the Kazakh-Romanian Energy Investment Fund.

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

The impact of the dewaxing plant will also be reflected in an increase in Rompetrol Rafinare’s contribution to the state budget (excise duties, VAT).

With an estimated completion time in September 2022, the investment value of this project amounts to about USD 35 million, the direct contribution of the Fund being about 30% and the difference following to be drawn by from local and/or international financial sources.

The second major project recently approved by FIEKR aims to finance the consolidation and increase process 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 of consolidation and increase of polymer production aims to convert the high-density polyethylene (HDPE) plant into a Polypropylene plant (PP), with the annual polypropylene production capacity following to increase from 90,000 tonnes presently to 120,000 tonnes by 2022.

The conversion will enable the consolidation of the jobs for 75 employees and increase by about USD 0.5 million the annual contribution of Rompetrol Refining to the state budget.

The investment amounts to about USD 8 million and will ensure production alignment with the demand for petrochemicals on the regional market. With the completion date of June 2021, the project will be fully financed from the Fund’s own resources.

With a duration of 7 years, the Kazakh-Romanian Energy Investment Fund was set up in October 2018 and aims to allocate an investment level of approximately USD 1 billion in the development of energy projects locally. In May 2019, through the Decision of the Extraordinary General Meeting of Shareholders, the first two major investments of the Fund were approved – the construction of a cogeneration plant on the Petromidia platform and the development of a local gas station network.

With an implementation period of 4 years, the cogeneration plant (of combined electricity and heat production) will meet the highest technological, energy efficiency and environmental protection standards. This will provide thermal agent and domestic hot water for the inhabitants of Navodari town and for the Petromidia platform – electricity and technological steam to support the activities of obtaining oil products.

The Fund will complete in the next short period the process of selecting a general contractor for the scope of EPC (Engineering, Procurement and Construction). The interest in the new unit is also reflected by the 17 local and international companies that have previously shown their interest in becoming suppliers of technological equipment and solutions.

At the beginning of December 2019, the Kazakh-Romanian Energy Investment Fund inaugurated a new gas station in Timis County, an investment of about USD 1.3 million. Currently, its fuel distribution network has 20 oil gas stations under the Rompetrol brand and which exclusively sells the range of Efix car fuels produced by the Petromidia Navodari refinery.

For the next 5 years, Fund aims to reach a network of 84 gas stations in Romania (the acquisition and modernization of existing stations plus the construction of 66 new gas stations), which will ensure the creation of over 1,000 new jobs, over 5,000 people involved in various phases of development (design, execution, construction) and over 1,200 trading partners.

Currently, the total level of investments of the Fund for the approved energy projects amounts to USD 290 million, the portfolio being represented by the development of a retail network, the construction of a new cogeneration plant and the recently approved projects – the dewaxing plant and the conversion of the HDPE installation.

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