Italian oil storage and distribution company Ludoil is in exclusive talks to buy the country's biggest oil refinery, the 320,000 b/d Priolo, in a deal that would lead to the plant's gradual decarbonisation.
Ludoil said it is "involved in a process of due diligence with a view to the possible acquisition" of the refinery, on the island of Sicily, from Cyprus-based private equity firm GOI Energy. Should the acquisition go through, Ludoil will gradually rejig production to offer low carbon products including sustainable aviation fuel (SAF), hydrotreated vegetable oil (HVO) and bioethanol, it said.
GOI has only owned the Priolo plant since early 2023, when it bought the refinery from Russia's Lukoil in a deal involving, via supply and offtake agreements, trading firm Trafigura. GOI beat out a rival bid from Vitol and Crossbridge, sources at the time said.
The deal was signed off by the Italian government under special powers on the back of commitments by GOI to maintain employment levels, diversify crude sources and invest in green hydrogen infrastructure.
But a source familiar with the matter said GOI had become unhappy with the terms of the crude supply arrangement with Trafigura and was looking for a way out. The source said the refinery needed heavy investment to remain competitive.
The Priolo complex combines refining, gasification and electricity cogeneration plants. It is considered a strategic asset by Rome, as it accounts for nearly 20pc of Italy's refining capacity.
In its statement, Ludoil also said it has contract for the loading and sale of oil products from the Priolo refinery, which began on Monday, 12 January.
Milan-based Ludoil operates a range of oil product distribution services designated by Rome as strategic national assets. It runs nine oil storage sites and 156 retail stations in Italy, and supplies Rome's Fiumicino airport with most of its jet fuel.
