Brooge Holdings Ltd and its wholly-owned subsidiary Brooge Petroleum and Gas Investment Company FZE (BPGIC), a Fujairah Free Zone Entity in the oil storage and services business, have announced that BPGIC entered into a refinery agreement with its Phase I off take customer, Al Brooge International Advisory LLC (BIA).
The refinery agreement provides that the parties will use their best efforts to finalise the technical and design feasibility studies for a refinery with a capacity of 25 000 bpd to be located on BPGIC’s Phase I and II land and operated by BPGIC. BPGIC and BIA further agreed to negotiate a sublease agreement and a joint venture agreement to govern the terms on which BPGIC will sublease land to BIA to locate, BIA will construct, and BPGIC will operate, the refinery. BPGIC and BIA expect that the refinery will produce low-sulfur fuel oil in compliance with IMO 2020 requirements.
Nicolaas Paardenkooper, CEO of both Brooge Holdings and BPGIC stated, “BPGIC expects the refinery to become operational at the end of 2020 and believes the economic terms of its new arrangement with BIA will be similar to, or better than, the economic terms of its prior arrangement.” The parties intend to enter a sublease agreement and a definitive joint venture agreement regarding the refinery within 30 business days. There can be no assurance that BPGIC will be able to negotiate commercially reasonable terms for such a sublease agreement and joint venture agreement or that it will be able to enter a sublease agreement and a definitive joint venture agreement with BIA at all.
Read the article online at: https://www.hydrocarbonengineering.com/refining/25022020/bpgic-signs-new-refinery-agreement-with-bia/
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