21 February 2013 15:59 [Source: ICIS news]
BUCHAREST (ICIS)--Romanian oil and gas company Petrom, which is majority owned by Austria’s OMV, is planning to demolish its Arpechim refinery if it does not find a buyer for the unit, the company’s CEO Mariana Gheorghe said on Thursday.
“We are waiting for final needed approvals and if in the meantime we don’t find a buyer for the refinery we will start to demolish it," Gheorghe added without mentioning a clear timescale of the operation.
The refinery was closed in early 2010 after Petrom said it was too small, inefficient and because it lacked good transport connections.
The move caused difficulties for chemical company Oltchim, which later that year bought Petrom’s mothballed Arpechim petrochemical unit, including a 200,000 tonne/year ethylene plant located adjacent to the refinery.
Oltchim purchased the petrochemical unit with the intention of revamping and restarting it to secure ethylene supplies. In 2011, Oltchim made an undisclosed offer to Petrom to buy its Arpechim refinery with the intention to become a fully integrated company but no deal was concluded.
The Arpechim refining and petrochemical facilities are located in Pitesti, southern Romania. The site also contains an 80,000 tonne/year low density polyethylene (LDPE) production line, which is linked to Oltchim’s facilities in Ramnicu Valcea by pipeline.
Oltchim is currently facing difficulties as production at its site has been severely restricted for more than a year as a result of a lack of working capital to secure feedstock supplies. At the end of January, the Romanian government started insolvency procedures at Oltchim in a move intended to pave the way for the company’s future privatisation.
The Romanian state holds a 54.8% stake in Oltchim, with Germany-based chemical producer PCC holding 18.3% and Cyprus-based Nachbar Services holding an additional 14.3%. Smaller shareholders hold the balance.
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