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Italy's Eni has this week met with national and regional institutions and with the trade unions to announce a project for the renovation and recovery of the Gela refinery, located on the southern coast of Sicily.

According to Eni, the aim of the new project is "to create an economically sound refinery capable of meeting the challenges of a competitive and constantly evolving market".

Since 2009, the refining business at Gela has accumulated heavy losses, amounting to approximately one third of the losses of Eni's entire refining system. The renovation and recovery project, for which an investment of approximately €700m is expected, aims to restore the site's economic sustainability by overcoming its structural weaknesses, Eni says.

The renovated site is expected to be fully operational in 2017. According to Eni, the Gela refinery will then be able to "generate profits through products more suited to market requirements, while at the same time restoring its reliability, flexibility and operational efficiency".

Explaining the reasons for the decision to refurbish the Gela plant, Eni said: "The refining industry is experiencing a structural crisis in Europe, particularly in the Mediterranean. The fall in demand for oil products has created excess capacity of approximately 100 million tons per year, equivalent to 1.5 times the entire annual consumption in Italy. This has resulted in a change in refinery utilisation rates from 95% in 2005-2008 to the current 70% and a simultaneous fall in refining margins, causing significant losses for the industry.

"Eni, unlike other European oil companies that are closing their refineries in Europe (15 have closed since 2008) in favour of investments in Asia and the Middle East, has decided to tackle the difficult economic situation without relocating, but rather by investing in the reorganisation of Italian sites experiencing a time of crisis."

Commenting on its technological and environmental plans for the future, the company said: "Eni believes in creating a competitive advantage through technological innovation and research. The recovery project will turn the Gela refinery into a technological hub. The refinery will be equipped with new, technologically advanced systems (next-generation hydrocracking technology), the new T-Sand catalyst (patented by Eni) for the production of high quality diesel and the first Eni "zero waste" system for the production of energy from industrial waste. Finally, research and development activities for the production of third generation biofuels from algae will also continue.

"Investments planned for the Gela refinery follow the previously announced transformation of the Venice refinery into a plant for the production of bio-fuels through proprietary 'ecofining' technology."