Gary Klesch, the investor buying a UK oil refinery at risk of being shut, is betting the plant can make a profit by making different fuels and changing where it sells them.

The Milford Haven plant in Wales will make more fuels like diesel when it starts processing again later this year and less gasoline, Klesch, the founder of Klesch Group, said by phone on July 31 after the deal was stated. A higher proportion of the refinery’s output will be sold in the UK rather than shipped to the US, he said. Murphy Oil Co., the seller, said in April it might close Milford Haven if a buyer couldn’t be found.

European oil refineries are shutting or converting to storage depots at the fastest pace in decades as competition intensifies from plants in the US, Russia and the Middle East. While the region has a gasoline glut, it also faces a looming shortage of diesel, Greenergy Fuels Ltd., the UK’s biggest buyer of automotive fuels, said in March. Klesch bought a refinery in Heide, Germany, in 2010.

“Our success with the German refinery gives us the confidence to go forward and be confident of making a success of this one too,” Klesch said. “We will look to get it up and running as soon as we close the deal at the end of October.”

Milford Haven is the smallest of seven refineries in the UK and can process 135,000 bbl of crude, according to data compiled by Bloomberg. That’s equal to about 13% of the nation’s total fuel-production capacity.

Klesch agreed to buy the plant from Murco Petroleum Ltd., a unit of Murphy, for an undisclosed price. The deal is subject to conditions. The transaction should be completed by October and refining should start soon after, Klesch said.

Sixteen European refineries, including Coryton in the UK, closed in the past six years, according to the International Energy Agency, a Paris-based adviser to 29 nations. Eni SpA, Italy’s largest oil company, began negotiations earlier this month to shut as much as 50% of its 774,000 bpd capacity.

Klesch’s operations include trading, according to the company’s website. The purchase fits in with the company’s strategy of expanding its refining business, according to Wood Mackenzie, a consulting firm.

“As a trader, having a refinery gives you a big advantage in the market,” Jonathan Leitch, a London-based senior analyst at Wood Mackenzie, said by phone on July 31. “It gives you flexibility because you never get left with a distressed cargo.”

Maximizing the diesel yield of the refinery will be one of the company’s first targets, Klesch said. The plant currently has an output of 33% for both diesel and gasoline, according to the UK Petroleum Industry Association.

“We will also look to focus more on inland sales,” Klesch said. “Instead of selling wholesale, we will look to sell retail in an effort to capture more of the UK domestic market.”