A major construction project which involves building a heavy residue processing unit at the Rijeka oil refinery was presented on Monday. The project, built by national oil firm Ina - co-owned by Hungary's national oil company Mol - is valued at 4 billion kuna (€530 million) and should be completed by the end of 2023.

Economy Minister, Tomislav Coric, and the CEO of Ina, Sandor Fasimon, visited the future construction site on Monday.

The project is supposed to improve the manufacturing scope of Rijeka Refinery and increase the share of profitable “white oil” products in its output. Company management said that this would help Ina cover Croatia’s domestic fuel needs, making imports unnecessary.

Together with last year’s 900 million kuna (€119 million) investment spent on preparing the facility for this upgrade, the whole project will cost nearly 5 billion kuna (€660 million) in the period from 2020 to 2023, Coric said.

“That makes it the largest investment in industrial plants in the past 30 years in Croatia,” Coric said, and added that the new plant would allow the refinery to produce high-quality diesel which would then eliminate the need for imports and pave the way for increasing refinery’s output capacity.

“The refinery should reach its full capacity in the last quarter of 2023,” Coric said.

Coric was asked to comment on government’s plan to buy back Mol’s nearly 50 percent stake at Ina. The other largest shareholder is Croatia’s government, and the idea came about after years of bickering over the company’s management and investment policies. It is unclear how far the plan has come.

Coric said that Croatia is not interested “in waging war” with Hungary but wants cooperation instead.

“In that context this investment in this unit, as an expression of interest by both co-owners – Croatia, and Hungary’s Mol – is proof that cooperation is possible. As far as the buyback process is concerned, we are currently in very intensive communication with the Hungarian side and a decision related to that process will be made in the first half of this year,” Coric told reporters.

Coric said that at the moment the Rijeka refinery has the production capacity which exceeds Croatia’s needs.

“Increasing the capacity from 4 to 4.5 million tonnes, and adding in production of diesel fuel, Ina will have even better coverage of the Croatian market, and even more exporting potential,” Coric said.

Ina’s CEO Sandor Fasimon said that this investment is “complex” and described it as Ina’s single largest investment projects in Croatia.

“Works on the project so far are going according to plan, and completion is expected in 2023,” Fasimon said.

A team of 40 experts is currently working on the project and there are about 150 workers on the construction site today. Once construction begins in full, the project will provide 1,500 jobs.