Sonatrach secures financing to support Italian refining business

The Arab Petroleum Investments Corp. has extended two loan facilities worth a combined $250 million to Algerian state-owned Sonatrach subsidiary Sonatrach Petroleum Investment Corp. (SPIC) to support Sonatrach Raffinera Italiana SRL’s (SRI) 198,000-b/d Augusta refinery in the province of Siracusa, Sicily.

The first loan, a $100-million bilateral prefinancing facility, will be used to fund maintenance of the Augusta refining complex, while a second $150-million unfunded and syndicated letter of credit is for SRI to use for purchasing crude oil feedstock for the refinery from Saudi Aramco, APICORP said.

The loans are intended to support SRI’s efforts to diversify energy assets, ensure steady crude supplies, and increase its geographic footprint, APICORP said.

“Our strategic investment in international refining through [SRI] will contribute to meeting local energy demand and address imbalances in petroleum supplies. This is of key importance to our efforts to diversify our energy assets and secure reliable supplies of crude oil, as part of our drive to meet local energy demand and address imbalances in petroleum supplies to the domestic market,” said Nordine Bouteldja, managing director of SPIC.

In its first overseas acquisition, Sonatrach purchased the Augusta refinery—which produces gasoline, distillates, fuel oils, lubricants, asphalts, and chemicals—from ExxonMobil Corp. subsidiary Esso Italiana SRL in a deal that closed in December 2018 (OGJ Online, May 16, 2018). As part of the purchase, Sonatrach also acquired three oil terminals in Augusta, Naples, and Palermo, as well as associated oil pipelines.

Following the late-2018 close of the transaction, SRI has invested €200 million in extensive maintenance work at the refinery, much of which involved improving environmental sustainability and efficiency of the complex, according to SRI’s website.

Alongside installing burners in the refinery’s low-NOx ovens, SRI also changed out all the burners in three large furnaces at three different plants within the complex. The operator also executed projects aimed at improving reliability of processing plants, including a major revamp of the refinery’s catalytic cracking unit that involved upgrading the plant’s equipment, instrumentation, and structure, SRI said.