NIS and US "CB&I Lummus" signed contract worth 396m EUR - modernization of Oil refinery in Pančevo

(Future looks of the complex of light hydrocracking and hydrofinishing in Pančevo)

"Petroleum Industry of Serbia" (NIS) and US company "CB&I Lummus" signed 396m EUR worth of contract yesterday (September 17, 2009) for construction of unit in Refinery "Pančevo" for euro-diesel and unleaded gasoline of "Euro 5" standard.

That investment will be finished in the third quarter of year 2012 when the unit should be put in operation, and it represents one of the obligations of Russian "Gazpromneft" for modernization of the refining complex in NIS according to the contract on sale of 51% of stocks of Serbian company.

The contract was signed by the Director General of NIS, Kiril Kravčenko, and the President of US company "CB&I Lummus", John Redmond.

- That contract will make it possible for Serbia to become key strategic player on the territory of the Balkans in few years, and it serves as a proof of good coperation between Serbia and Russia - Kravčenko estimated.

Following the signing of the contract, the Minister of Energy of Serbia, Petar Škundrić, estimated that that investment had been significant for the entire Serbian economy because it took place at the time when the effects of global economic crisis were strongly felt.

- That is the best response to the crisis because the investment will lead to employment of 1,000 people in Serbia's building sector and NIS - Škundrić added.

According to the data provided by NIS, the equipment for aforementioned unit will be purchased within the next two months, while the active phase of construction will start in summer 2010.

Once construction of the unit is finished, annual production of motor unleaded gasoline will be increased to 638,000 tons, while production of "euro diesel 5" will grow from current 230,000 tons to 1.5m tons.

Russian state-owned company "Gazpromneft" took over the management of "Petroleum Industry of Serbia" in February 2009 after it paid 400m EUR for 51% of stocks of that company. "Gazpromneft" is obliged to invest 548m EUR in modernization of NIS prior to year 2012.