Gunvor Confirms Final-Stage Talks to Buy KPI Rotterdam Refinery

  • Agreement would see struggling plant continue to operate
  • Oil-trading firm already controls two European refineries

Gunvor Group Ltd., the Swiss commodity trader seeking to diversify from its Russian roots, confirmed it’s in final talks with Kuwait Petroleum International to purchase the Europoort refinery in Rotterdam.

An agreement would see the 88,000-barrel-a-day plant continue to operate, the company said Thursday in a statement, without disclosing financial terms. Rival bidder HES International BV had planned to cut the site’s capacity and convert some to storage.

Independent oil traders such as Gunvor, one of the world’s five-largest, have been purchasing refineries, storage tanks, pipelines and other infrastructure assets to complement their trading operations. While Europe’s refineries are enjoying the highest margins in years after the oil-price slump cut feedstock costs, some older plants such as Europoort, built in 1962, have still struggled.

The planned acquisition, first reported last week, would give Gunvor a third European refinery alongside plants it controls in Ingolstadt, Germany and Antwerp, Belgium. The closely held company has been seeking asset deals in Europe, Asia, Africa and the U.S.

Gunvor has earned about $1.7 billion selling Russian assets, including the Ust-Luga product terminal, after its co-founder Gennady Timchenko was sanctioned by the U.S. for his close ties to Russian President Vladimir Putin.

Timchenko Sale

Timchenko sold his 44 percent stake in the company, which has major trading operations in Geneva, Singapore and Dubai, to fellow co-founder and Chief Executive Officer Torbjorn Tornqvist the day before being sanctioned. Terms of that sale weren’t disclosed.

Gunvor beat out seven other interested parties for the Rotterdam refinery, including HES, a storage and logistics company backed by private-equity firms Carlyle Group and Riverstone Holdings LLC.

Known as Q8 Europoort, the plant is the smallest in the Dutch port: its capacity trails Gunvor’s 110,000-barrel-a-day plant in Ingolstadt and the 107,500 barrels it can process in Antwerp. The Cyprus-registered company paid $150 million for Ingolstadt and $8 million for the Antwerp site, according to a 2013 bond prospectus.

Kuwait Petroleum acquired Q8 Europoort in 1983. It canceled plans last year to invest about $1 billion to upgrade the refinery and instead offered the plant for sale.

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