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Bulgaria refinery delayed, Austrian investor quits

Bulgarian company Petromaxx has delayed the start of a planned 30,000 barrels per day oil refinery and a leading investor in the scheme is leaving the project, a company official said on Wednesday.

The startup of the refinery in northeastern Bulgaria has been put back a year and a half until the middle of 2009, Vladimir Nenchev, manager of the Bulgarian company, told Reuters. This is the second delay of the planned plant at the Danube river town of Silistra due to longer-than-expected construction of a gas-fired power plant needed to operate it and regulatory approvals. Nenchev said the 60-megawatt power plant should be ready by the end of next year, allowing tests at the refinery to start and become operational in May-June 2009. “We are delaying the refinery for a year and a half, until May-June 2009, because we needed to build a bigger thermal power plant and we had to wait for its license,” Nenkov said.

Nenchev said the key investor in the plant, Austrian oil trader Petromaxx Energy Group, plans to leave the project and is in talks to sell its stake in a deal that should be finalized by the end of the year. He declined to elaborate, but said that the project, now estimated to cost $240 million, would not be halted or blocked due to the change in ownership and is backed by Belize-registered Vladimpex Group. “The Austrian investor is exiting the project. The new structure that will be behind the refinery will be clear in the next three to four weeks,” he said. Nenchev said the company has a contract with Russia’s oil firm Rossgaz to supply it with crude oil and the shipments will start six months before the launch of the refinery.

Bulgaria currently has one operational 140,000 barrels per day (bpd) refinery, controlled by Russia’s LUKoil, which supplies about 80% of the country’s motor fuel needs. Last month the new owners of the Balkan country’s bankrupt oil refinery Plama said they plan to restart production in six months and process initially 600,000 tons (about 12,000 bpd) of crude per year. It plans to expand capacity to two million tons a year in the next year and a half. Nenkov said the domestic demand for refined oil products was increasing and did not see a challenge to his project from the planned restart of Plama or the operations of LUKoil’s refinery. Petromaxx plans to cover some 15% of Bulgaria’s fuel needs. (