Memorandum signed for construction of Refinery in Smederevo - investment worth 250m EUR

The Memorandum of Understanding, which will enable construction of an oil refinery in Smederevo, worth 250m USD, was signed yesterday (November 10, 2009) in Belgrade.

The Memorandum was signed by the Mayor of Smederevo, Predrag Umičević, the CEO of CIP, Milutin Ignjatović, and the Deputy Director of company "Comico oil", Radomir Radivojević. According to the announcement, concrete contracts are expected to be signed already at the end of the next week.

- Construction of a refinery in Smederevo is the most important economic news in the last decade. Foreign media already comment that it will be the largest investment in Europe - said Radivojević and added that the commencement of construction was expected in spring 2010.

He pointed out that the refinery would be built according to the latest environmental standards and that it would be producing about 100,000 barrels of crude oil per day.

According to his words, US company "Global Energy Group", which is a stockholder of company "Comico oil", will be supplying crude oil to the refinery in Smederevo, and contracts with companies that will be distributing fuel in the region have already been signed.

- The plan is that certain share of derivatives be offered to the local market - said Radivojević and added that the company did not plan to open its own gas stations, but to sign contracts with local companies such as NIS.

According to the words of the Mayor of Smederevo, Mr. Umičević, the decision about the commencement of the procedure for rental of land for construction of the refinery has already been made at the meeting of the local Assembly, but it will also be necessary for the lease contract to be confirmed by the Assembly.

- The Plan for detailed regulation should also be adopted at the meeting of the Municipal Assembly - said he and reminded that that document was also important for the beginning of realization of the investment.

The CEO of CIP, Mr. Ignjatović, said that the Memorandum had been signed after two months of negotiations, and he expressed satisfaction with the fact that CIP would participate in such big project. According to his words, the Transportation Institute is already engaged in realization of several projects in Smederevo, in the field of road and rail infrastructure, and he expects CIP to be engaged in elaboration of the project documentation for the port of Smederevo as well, of which construction is also in the pipeline for the future period.

As he explained, CIP should provide the project documentation that concerns the connection of the refinery with road and rail traffic, as well as oil pipeline.

- CIP's projects will contribute to production of high-quality fuels in the refinery, including euro diesel 10, euro diesel 8 and kerosene - Ignjatović pointed out.