BUKHAREST (Romania-Insider) — KMG International (KMGI), part of Kazakhstan’s National Company KazMunayGas, will close the deal to purchase a 26.7% stake in Rompetrol Rafinare out of the 44% holding owned by the Romanian government in the first half of 2019.

Petromidia Refinery

The largest Romanian oil refinery and one of the largest in Eastern Europe, located in Năvodari, Constanţa County. It has an annual processing capacity of 4.8 mln tonnes/year or 100,000 bbl/d (16,000 m³/d). The refinery is supplied with oil through an oil terminal located in the Port of Midia that can accommodate ships up to 24,000 DWT or by a pipeline of 40 km which has a terminus in the Port of Constanţa.

Kazakh group KazMunayGas International, which owns the biggest oil refinery in Romania — Petromidia, and the Romanian company that manages the state’s stakes in energy companies — SAPE, signed on Friday the association agreement for launching the Kazakh-Romanian Energy Investment Fund.

The Kazakh-Romanian fund is estimated to reach $1 bln in investments over a period of 7 years.

KMGI’s initial contribution to the fund is $150 mln while the contribution of the Romanian state representing $30 mln will also be committed by KMGI. The Kazakh group will hold 80% of the fund’s shares and the Romanian state 20%.

KMGI has already identified at least two major projects that the fund can develop, with the total amount of investments exceeding $200 mln, namely the construction of a cogeneration plant on the Petromidia platform ($120 mln) and the expansion of Rompetrol’s local gas stations network with approximately 80 new locations ($100mln). These two investments would also help create some 2,000 new jobs.

The creation of this fund was included in the Memorandum of Understanding between KMGI and the Romanian state concluded in 2013, which also provided that the Kazakh group would buy part of the Romanian state’s stake in Rompetrol Rafinare (Petromidia). The Romanian government led at that time by Victor Ponta agreed to sell 26.7% of the company’s shares for $200 mln and to keep an 18% stake in the company.