Privately held CEFC China Energy Co. Ltd., Shanghai, has agreed to acquire 51% of shares in KMG International NV—the refining, petrochemicals, retail, and trading arm of Kazakhstan’s state-owned KazMunayGas—as part of the creation of a joint venture designed to extend participation of China and Kazakhstan in development of downstream projects to serve European markets.
As part of the agreement, signed on Dec. 15 in Bucharest, CEFC will undertake a number of investments in Europe and Silk Road countries to jointly develop with KMGI projects in the fields of refining and retail outlet networks, KMG and KMGI (formerly Rompetrol SA) subsidiary Rompetrol Rafinare SA said.
The deal also calls for CEFC’s commitment to support implementation of KMGI’s development plans in Romania and the Black Sea region, which include works to expand KMGI’s overall refining capacity to 10 million tonnes/year, as well as project investments to help sustain and extend operations of Rompetrol Rafinare’s 5 million-tpy Petromidia refinery in Navodari, Romania, KMGI said.
While jointly developed projects will be executed abroad, most of the major projects to be implemented as part of the strategic agreement between CEFC and KMG will be located in Romania, which is the business priority, KMGI said.
Pending final approvals from Romanian regulators, the European Commission, and respective financial institutions, the transaction is scheduled to be completed during first-half 2017, says KMG, which will hold a 49% interest in the newly formed JV.
Specific financial details of the proposed partnership were not disclosed.
Alongside the Petromidia refinery, KMGI, through Rompetrol Rafinare, also owns the 305,000-tpy Vega refinery in Pahova County, near Ploiesti, Romania.
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