BRATISLAVA, Nov 15 (Reuters) - Slovakia’s biggest oil refinery Slovnaft, owned by Hungary’s MOL, will invest $500 million by 2020 to upgrade its petrochemical unit to diversify away from fuels, where demand is expected to decline, its chief executive said on Tuesday.
The investment is part of MOL’s strategy to invest $4.5 billion in petrochemicals by 2030.
Slovnaft said it aimed to increase the share of non-fuel production to 50 percent from the current 10-15 percent. The refinery’s throughput is 124,000 barrels per day.
“We see the demand for fuels falling by up to 15 percent by 2030,” Slovnaft Chief Executive Oszkar Vilagi said.
“We have to be flexible, process the same amount of oil but make more products out of it such as polypropylene, polyethylene.”
Slovnaft launched a new 300 million euro ($323 million) low-density polyethylene unit last year.
The MOL group is also interested in investing outside its core business and will set up a venture capital fund to look for potential projects, Vilagi, who is a board member of the parent firm, said without giving details.
MOL Chairman Zsolt Hernadi told Reuters this month that the Hungarian oil group will invest in new chemical plants to cut its dependence on producing fuel for cars, while also buying more upstream assets and selling goods and services in its petrol stations.
In its 2035 Energy Outlook released in February, BP forecast global demand for energy would increase by 34 percent, driven by growth in the world population and economy, but the share of oil will fall in favour of gas and renewables. ($1 = 0.9287 euros) (Reporting by Tatiana Jancarikova; Editing by Adrian Croft)