Investments in “Petrohemija” from January, 60MEUR JV of GazpromNeft and Serbian gov.

, News Serbia Energy

Serbia will form a joint investment in Pancevo “Petrohemija” with the Petroleum Industry of Serbia / NIS /starting from January, said Minister of Finance and Economy Mladjan Dinkic today in Pancevo. “NIS will invest EUR 20 million, and Republic of Serbia will invest additional 40 million Euros, and the completion of the new investment is expected in mid-2014 when ‘Petrochemija’ would finish the restructuring process and become a profitable company” said Dinkic.

Minister visited the reconstructed plant for the production of high density polyethylene / HDPE / in Pancevo “Petrohemija” together with Director General of NIS, Kirill Kravchenko and director of “Srbijagas” Dusan Bajatovic , announced the Ministry of Finance and Economy of Serbia.

Dinkic said that the reconstruction of this unit is the first phase of revitalization of “Petrohemija”, and that theGovernment of Serbia in cooperation with NIS will move to the second phase of the investment cycle worth 60 million Euros, starting from January which will be completed within two years.

The total amount of investment for the modernization HDPE unit was 6.1 million, out of which EUR 2.5 million was spent for the execution of works and 3.6 million have been invested in the purchase of modern technological equipment.

Funding for activities to modernize the unit were provided from the money flow of “Petrohemija”, with full support from the government and representatives of  NIS, which provided logistical assistance and consultation on this project to the partner company.

Production capacity of the plant after the investment has been increased from 70 to 90,000 tons of HDPE per year. It is expected that this investment will repair the company’s financial results significantly and, as such it is an important step in the recovery of the company.

An additional positive effect coming from the start up of HDPE unit with increased capacity is that this increases the ethylene plant capacity but also allows the recovery of production in the factory “Panonijaplast”, where the production has been suspended since 2009.

Source Serbia Energy Magazine