An update on the conversion of the Gela refinery from a traditional cycle to a Green Refinery was presented today, and work was started as early as last April. With the beginning of construction work, immediately after the conclusion of the authorization for Phase 1, the transformation project for the Gela Refinery enters a crucial phase.
The Green Refinery Project, outlined in the Memorandum of Understanding signed on 6 November 2014 at the Ministry of Economic Development between Eni, the trade unions, institutions and Confindustria, is expected, through the enhancement of existing facilities and the application of proprietary technologies, to convert unconventional (palm oil) and second generation (animal fat, frying oils) raw materials into green diesel, green LPG and green naphtha.
Just two months after obtaining the relevant authorization, and in continuity with the preparatory construction last February, to date about 130 local resources are employed in the construction of the Green Refinery, of which 100 in construction activities and 30 for the engineering phase. During 2016, a spike in the local resources employed is expected to exceed 200, to which a further 50 external resources will be added.
Also, about a year ahead of schedule, in June the order was placed for the supply of the plant for the production of steam reforming hydrogen, one of the main systems of the project.
The event was also an opportunity to provide a progress report on the initiatives foreseen in the Memorandum of Understanding, and confirm that operations are proceeding in line with the commitments undertaken.
Of particular significance is the economic commitment: from the signature of the MoU to date, Eni has invested about €310 million, with a projected end of year figure is expected to exceed €400 million, subject to the further authorisations.
On the employment front, 70 construction sites have been started up, of which 35 have already been completed; and there are plans for a further 32 sites in the remainder of the year. In terms of direct employment, the commitment in the MoU is to keep up to 400 resources in the refinery and today there are 455. Of the more than 500 relocated, 276 were transferred to Eni activities based in Gela and another 26 to other Eni sites in Sicily. These relocation have been carried out without recourse to redundancies, with a programme of upgrading and repositioning at other Eni facilities.
As part of upstream activities, to date the economic commitment is equal to 70% of the total spent on activities for the exploitation of mature fields. With regard to the project for the development of the offshore Argo and Cassiopeia gas field, the engineering phase has been completed we are awaiting the outcome of the appeal to the Council of State against the EIA/AIA decree and the concession promoted by environmental groups and 4 municipalities in Sicily, expected in the coming months.
With regard to environmental remediation, all authorised activities have been completed or are in progress. Since the signing of the MoU around €82 million has been spent and 24 sites begun, despite difficulties and delays in the authorisations. An additional 11 sites are expected to start up before the end of the year, among which the most important is related to the closure of the ISAF facility, which should finally start in the coming months after a lengthy authorisation process, once final approval is given by the Regional Council.
Eni is also engaged in an important activity which aims to ensure the reliability, technical integrity and operability of its assets, and involves periodic verification monitoring and the replacement of parts of installations conducted in order to prevent potentially critical situations. The costs incurred up to 2015 for this activity have amounted to more than €80 million and over the next four years expenditure is estimated to exceed €50 million.
Activities related to the Safety Training Centre (SCC), which opened in January 2015, are proceeding well and to date have included the retraining and training of 137 of the Gela refinery staff as safety experts. With the creation of the Safety Training Centre, Eni has also gone beyond the stated commitment in the MoU. In fact, the new centre will provide training and refresher courses in relation to the conduct of on-site operations. The Safety Training Centre became operational in June 2016 and can host up to 1,400 employees a year, offering important opportunities for the area.
As evidence of the centrality of the issues related to environmental sustainability and the “green economy”, as part of the MoU, feasibility studies related to green chemistry and green mobility have been carried out. In the field of Green Chemistry, in line with the MoU, Versalis completed a study of industrial feasibility and initiated an experimental agricultural sector project. At the beginning of June the transplantation of 100,000 guayule seedlings was completed at 2 farms belonging to the Sicilian Agricultural Development Authority (ESA). Initial results will be available in the second half of 2017. With regard to Green Mobility, the preliminary results of the study for a logistics base in Gela for the distribution of LNG/CNG was completed in 2015. The assessment points to two possible solutions for small-scale LNG facilities focused on the regional market. On 31 May 31 the first technical meeting was held with MiSE, the Sicily Region and the Municipality of Gela for the start of a phase lasting about six months to verify the technical and commercial feasibility of developing the initiative at an industrial level.
With regard to compensation efforts, to date 3 agreements have been signed with the Region and the Municipality of Gela, the last of which on 30 March 2016 for the construction of a co-working space. The total financial commitment related to the 3 agreements is estimated at €1,175,000.
In addition, with a view to further contributing to the identification of solutions to revive and diversify the local economy, Eni has commissioned, in agreement with the Region and Municipality, Nomisma, one of the most important companies for strategic studies in Italy, to draw up a study aimed at the enhancement and requalification of the area.
In conclusion, the commitments and further initiatives of the MoU, already undertaken or in progress, highlight the attention given to the Gela area.