Equinor has entered into an agreement with the Klesch Group1 for the sale of its refining business in Denmark.
The agreement covers the Equinor Refining Denmark A/S (ERD) company consisting of the Kalundborg refinery and terminal in the northwest of Zealand, the Hedehusene terminal near Copenhagen as well as associated infrastructure and industrial property.
Upon completion of the transaction, including approval by Danish authorities, all ERD employees will be transferred to the Klesch Group with equitable employment terms as within Equinor.
“This transaction supports Equinor’s strategy to focus its portfolio around core areas. Equinor will concentrate its refining position around Mongstad, Norway, where the company can leverage its integrated industrial cluster, expand the portfolio of low carbon energy products provided and contribute to Equinor’s efforts in the energy transition. Over the years, Kalundborg has provided solid results and strong efforts have been made to maintain safe and reliable operations, also with the recent challenges caused by the pandemic” says Irene Rummelhoff, Equinor’s Executive Vice President for Marketing, Midstream and Processing.
Irene Rummelhoff (pictured left), Equinor’s executive vice president for Marketing, Midstream and Processing, and A. Gary Klesch, the chairman of the Klesch Group (pictured right)
The Klesch Group has been in refining for over 10 years and is well positioned to take the business further. In a statement, A. Gary Klesch, the Chairman of the Klesch Group, says:
“I am so pleased that we were able to reach an agreement today to purchase the Kalundborg refinery from Equinor. The refinery is first class and so are its people. It was challenging during the covid pandemic to undertake this acquisition, but through the hard work of both my team and Equinor’s team, we were able to get there in the end. Given the proximity of our refinery in Germany, I’m sure there will be lots of opportunities for both refineries to work together; especially when it comes to deploying our decarbonisation strategy”.
The Kalundborg refinery was built in 1961 and was acquired by Equinor in 1986 before significantly increasing capacity in 1995. The plant can process 107,000 barrels a day of crude oil and condensate for gasoline, diesel, propane and heating oil. Annual production capacity is up to 5.5 million tonnes of oil products.
Completion will, among other things, be dependent on approval by the Danish authorities. Further commercial details on the transaction will not be disclosed.
The two refineries, Kalundborg and Mongstad, are independent and separate enterprises, with separate markets and largely their own competence bases. Equinor will continue to develop the refinery business at Mongstad. Mongstad is tightly integrated into Equinor’s oil and gas value chain and plays a significant role in the development of new value chains, such as hydrogen, biofuel and ammonia.
This transaction does not affect Equinor’s ownership and/or operation of Danske Commodities, headquartered in Aarhus, Denmark.
1 The Klesch Group is an international industrial commodities group founded in 1990. The company is involved in the production and trading of oil and metals, as well as other global commodities and related financial derivatives. The group currently employs 650 professionals across seven locations in five countries.
Lise Andreassen Hagir, media spokesperson Equinor Group + 47 41657507
Richard Mountain, Senior Managing Director FTI Consulting (representing Klesch Group) +44 7909 684466