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Serbia starts talks for sale of HIP Petrohemija to Gazprom Neft subsidiary

October 21/2021

MOSCOW (MRC) -- Serbian authorities have officially begun negotiations with Gazprom Neft-controlled Naftna Industrija Srbije (NIS), which was the only one to file an application in the privatization of HIP Petrohemija, Serbia's largest petrochemical producer, said Finam, citing Secretary of State Serbian Ministry of Economy Dragan Stevanovic's statement.

"The government made appropriate decisions last week, and yesterday we officially started negotiations with NIS as a potential strategic partner," said Dragan Stevanovic as seen in a video file posted on the website of Tanjug news agency on Wednesday.

NIS placed the sole bid in a tender for a strategic partner in HIP Petrohemija earlier this month. The strategic partner intends to inject EUR150 million (USD177 million) in the capital of HIP Petrohemija, acquiring a stake of up to 90% in the company's capital.

"NIS has already accepted the commitments in its offer, which is that in the next six years it will invest EUR150 million in HIP Petrohemija's plant, will build a polypropylene production plant with a capacity of at least 140,000 tonnes per year and will keep the optimal number of workers," Stevanovic said.

As MRC informed earlier, in 2014, HIP Petrohemija began preparations for the integration of production with the Serbian NIS. The expansion and deepening of the industrial and technological ties of the companies, initiated by the government, was to be completed by March 2014. The facilities of both companies are located in the town of Pancevo, northeast of Belgrade.

It was also reported that in late 2012, HIP Petrohemija completed the modernization and expansion of a high density polyethylene (HDPE) plant. The capacity of the new unit increased by 30% and became over 90,000 tonnes per year. Somewhat earlier, an ethylene plant with a capacity of 200,000 tonnes per year was put into operation. The HDPE plant and ethylene plant had been closed since early September 2011 when the renovation and expansion project began.

The Serbian government owns a 75.27% stake in the capital of HIP Petrohemija, NIS owns 20.86%, Russia's Lukoil controls 3.09%, while the remainder is in the hands of smaller shareholders.

HIP Petrohemija owns petrochemical complexes in Pancevo, Elemir and Crepaja. It specialises in producing high-density polyethylene (HDPE), low-density polyethylene (LDPE) and other petrochemical products with an annual production capacity of 700,000 tonnes.
Author:Margaret Volkova
Tags:PE, LDPE, HDPE, ethylene, petrochemistry, Gazprom neft, HIP Petrohemija, Serbia.
Category:General News
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