FEED is expected to be completed by the end of 2017, when a final decision should be made to build the plant, it was said at the contract signing in the northern Adriatic seaport of Rijeka.
INA management board chairman Zoltan Aldott said the contract was an important step in the realisation of the project and that it had been part of INA's strategic goals for years, although market circumstances had changed.
Commitment to the development of the Rijeka Refinery has not changed nor the commitment to maintaining INA's leading role in the Croatian economy, he said, adding that INA was one of the biggest domestic investors and exporters.
Over the past five years, INA invested HRK 8 billion in core business and has had one of the biggest reinvestment rates in Croatia for years, Aldott said.
He said the Rijeka Refinery modernisation project was worth HRK 3 billion and that it was one of the biggest investments in Croatia ever, aimed at enhancing the refinery's competitiveness and position on the regional and European levels.
The Rijeka Refinery now puts out 2.5-3 million tonnes of oil products and, with the new plant, it will be able to produce 4.5 million tonnes, an increase of 25-30%, Aldott said.
INA wants to be one of the best and with such a big investment, other factors must be taken into account, including the regulatory environment in which INA operates, so INA wants to find a model of cooperation with the relevant bodies, Aldott said, confident that such a model can be agreed and that there is plenty of time for that.
Asked by the press if the final decision on the construction of the plant depended on a solution to the taxation of refinery production, he said INA and its shareholders must be sure that the project was cost-effective and the environment good. Taxes are part of that, he added.
Environmental Protection and Energy Minister Slaven Dobrovic said the government would solve all outstanding issues constructively when asked if the refinery production tax issue would finally be solved.
He said today's contract was a good sign that the belated modernisation of the Rijeka Refinery was finally being embarked on, adding that it was necessary to invest in plants meeting the highest technological and ecological standards.
We welcome that and hope a contract on the construction of the plant will be signed in a year's time, Dobrovic said. As for the project's impact on the environment, he said these were changes which followed market demands concerning product quality and that the impact on the environment was decreasing.
FEED will define the planned residue upgrade plant and accompanying facilities and also how they will be integrated with the existing refining systems, INA said, adding that it will invest over HRK 200 million in this phase of the project in 2016 and 2017.
A decision on whether the plant will eventually be built should be made by the end of 2017. If the decision is positive, the plant could be inaugurated in 2021. INA has already invested HRK 40 million in the project and obtained development permits. The plant would enable the production of up to 200,000 tonnes of petroleum coke a year.
(EUR 1 = HRK 7.5)