Russian oil producer Lukoil, through its subsidiary Litasco S.A, has finalised a deal to divest its ISAB refinery located near Siracusa in Sicily, Italy, to a group led by Cypriot private equity firm G.O.I. Energy.

As part of the transaction, Litasco will sell ISAB S.r.L., which owns a petrochemical complex comprising refining, gasification, and electricity cogeneration plants in Italy.

The deal, which is backed by Geneva-based Trafigura, is anticipated to close in March 2023.

Although the value of the deal has not been disclosed, earlier price deliberations with other undisclosed bidders were just below €1.5bn ($1.61bn), according to Reuters.

Trafigura, which will not own a stake in the refinery, will be responsible for providing some financing.

In a press statement, Lukoil said: “For the efficient operation of the complex after its acquisition, G.O.I. Energy formed a partnership with Trafigura, one of the world’s largest international traders of oil and petroleum products, w​hich secures uninterrupted feedstock supplies to the refinery and provides for production offtake, as well as necessary working capital level.”

The transaction is subject to certain conditions including the receipt of necessary approvals from authorities, particularly the Italian Government.

Italy’s Industry Ministry said was quoted by Reuters as saying in a statement: “The government will demand commitments in terms of converting the plant to green energy and its industrial revitalisation.”

With a refining capacity of 320,000 barrels per day of crude, the ISAB plant accounts for a fifth of the European country’s refining capacity.

It directly employs approximately 1,000 people in the country’s southernmost region.