Frankly News – The Jordan Petroleum Refinery Company confirmed that technical, financial, legal and environmental studies and consultations, as well as basic and detailed designs for the fourth expansion project, cost an amount of 47.5 million dinars until the end of last year.
The company also expected that an estimated amount equivalent to about 6.4 million dinars would be paid during the current year on these items
In addition, the company’s financial statements showed that its net profit for the past year rose to 105.8 million dinars, compared to 52.2 million in the previous year, an increase of 103%, while its net sales amounted to 1.7 billion dinars, compared to 1.2 billion dinars in 2021.
Returning to the expansion project, the company said in its report that it had finished evaluating the technical and financing offers submitted by the consortia applying for the implementation of the fourth expansion project, and that it is currently completing the negotiation stage with the consortium with the best offer, which is a consortium composed of an Italian, Chinese and Japanese company, Tecnimont-Sinopec (Tecnimont-Sinopec). GPEC-Itochu, and that progress in the negotiation process is subject to the exemptions from taxes and government fees that the consortium requires to sign the contract
The company is also still following up with the concerned government agencies to obtain exemptions from taxes and government fees required by the consortium in order to be able to conclude a project implementation contract.
The objectives of the fourth expansion project, which has a total cost of about $2.64 billion, are summarized in meeting the growing needs of the local market for oil derivatives, complying with environmental requirements within and around the refinery and in the specification for produced oil derivatives, and stopping the production of high-sulfur fuel oil.
The Jordan Petroleum Refinery Company conducted the first expansion project in 1970 by increasing the refining capacity to 2,100 tons per day, and completed the second project in 1973 by increasing the capacity of the conversion unit, while it completed the third project in 1982, by increasing the refining capacity to 8,700 tons per day, while the fourth expansion project works on Increasing the refining capacity to about 14,000 tons per day
The company indicated that, according to the latest market studies conducted by the American company Wood Mackenzie, which previously prepared the market study, it showed an improvement in the prices of oil derivatives. Accordingly, it was tasked with updating price forecasts, Pricing Forecast in the market study, and accordingly the financial model was updated. , which led to a significant improvement in the rate of return on investment
With regard to the environmental and social matters of the project, the company said that the New Directions Company, Eco Consult, was addressed to submit a detailed technical and financial offer to work as an environmental and social consultant for the fourth expansion project during the Due Diligence audit phase, in cooperation with an international company accredited by specialized financing agencies (ECA). In the areas of the best available technologies, in order to reduce greenhouse gases and sequester carbon for refineries, noting that the Ministry of Environment has approved the terms of reference for the environmental audit study of the company’s facilities and the environmental and social impact assessment of the fourth expansion project in accordance with the environmental classification and licensing system and its amendments No. 69 of 2022.
With regard to appointing a Lead Arranger to manage the affairs of the ECAs and follow up the financing matters for the project, the financial advisor for the project, Standard Chartered Bank, whose contract was extended to the end of the current month of April, provided the company with a list of recommended banks and companies, in addition to providing the company with the field of work. What is required is this, and the terms of reference will be prepared to attract one of these banks and companies
In addition, the company indicated that, at the beginning of March of last year, the company obtained all the necessary licenses from the Energy and Minerals Regulatory Authority, in order to continue to practice its various activities, as the company obtained a license to practice refining and storage activity and a license to practice liquefied gas activities. various activities, central distribution of liquefied gas, and a license to practice various mineral oil activities, in addition to a permit to build the fourth expansion project for the refinery.
In terms of the financial relationship with the government, the company said that it is still communicating with the government to agree on the remaining matters related to the financial relationship between them, and to resolve the remaining impediments, especially the payment of sums owed by the government, after the company concluded last June a settlement agreement. Financial with the National Electric Power Company to pay off the National Electricity Company, the benefits of delayed payment and the benefits of the installment process, and to be paid within a year, according to equal installments, starting from the month of July
Negotiations with the government are still ongoing to determine the value of the gas activity commission for the years 2019 and 2020, which reflects an annual rate of return on investment of 12%. It was also agreed with the Ministry of Finance to pay an amount of 105 million dinars during the first quarter of this year.