Representatives of Ina and the Spanish company Tecnicas Reunidas signed a contract on Thursday for the development of a detailed engineering project for a heavy residue processing plant at the Rijeka Oil Refinery in Urinj, through which Ina continues preparations for an investment in the modernization of the refinery worth approximately $400 million. The engineering project is expected to be completed by the end of next year, when a final decision on the construction of the plant is also anticipated, it was emphasized at the contract signing in Rijeka.
The CEO of Ina, Zoltan Aldott, stated that the contract for the development of the technological project is an important step towards the final realization of the project and that it has been part of Ina’s strategic goals for years, although market conditions have changed. The commitment to further develop the Rijeka refinery has not changed, nor has the commitment to maintain Ina’s leading role in the Croatian economy, Aldott emphasized, adding that Ina is one of the largest domestic investors and exporters. According to him, Ina has invested around 8 billion kuna in core activities over the last five years and has had one of the highest reinvestment rates in Croatia for years.
Aldott highlighted that the total value of the Rijeka refinery modernization project is around 3 billion kuna. This is one of the largest investments in Croatia ever, which improves the competitiveness and position of the Rijeka refinery at the regional and European levels, he said.
The Rijeka refinery currently produces about 2.5 to 3 million tons of petroleum products, and after the project is realized, with the new plant, it will be able to produce about 4.5 million tons of petroleum products, representing a significant development of 25 to 30 percent, Aldott emphasized. He stated that Ina wants to be among the best and that there are other factors that must be taken into account when it comes to such a large investment. The regulatory environment in which Ina operates is also important, and therefore, Ina wants to find a certain model of cooperation with the relevant authorities, Aldott said. He is convinced that such a model can be agreed upon, for which he believes there is enough time.
In response to a journalist’s question about whether the final decision on construction depends on resolving the issue of taxation of refinery production, Aldott said that Ina and its shareholders must be sure that the project is profitable and that the environment is good. Taxation is part of that, he emphasized.
The government will constructively address all open issues, announced the Minister of Environment and Energy, Slaven Dobrović, who was also asked by journalists whether the issue of taxation of refinery production will finally be resolved. Minister Dobrović emphasized that today’s contract is a good sign that the delayed, but still necessary modernization of the Rijeka refinery is underway.
– For the continuation of successful operations, investments in facilities in accordance with the highest technological and environmental standards are needed. We welcome this and hope that soon, already next year, there will be a similar event where a contract for the construction of the plant will be signed, Dobrović said.
Speaking about the project’s impact on the environment, the minister stated that these are changes that follow market demands regarding product quality and that the environmental impact is certainly being reduced.
From Ina, they remind that the detailed engineering project will show how the planned heavy residue processing plant and accompanying facilities will integrate with existing refinery systems during construction, and Ina will invest more than 200 million kuna in this development phase in 2016 and 2017. Along with the heavy residue processing plant, a new port, a closed storage facility for produced coke, a transformer station, and a power line will be built, and several existing refinery facilities will need to be reconstructed.
By the end of 2017, a final decision is expected on whether the heavy residue processing plant will be built or not, and if a decision is made to proceed with construction, the new plant could start operating in 2021.
Ina has already invested more than 40 million kuna in the project and has obtained location permits, with the next phase being the design and obtaining construction permits. The new plant will be located in the center of the refinery and will enable, among other things, the production of up to 200,000 tons of petroleum coke per year.
