Negotiations on financing project for construction of refinery in Turkey completed

Photo: Negotiations on financing project for construction of refinery in Turkey completed / Oil&Gas

Baku, Azerbaijan, April 12
By Emil Ismayilov - Trend:

The State Oil Company of Azerbaijan (SOCAR) has completed the negotiations with banks regarding the participation in financing the project for construction of a new Star refinery in Turkey, SOCAR head Rovnag Abdullayev told journalists on April 12.

It is planned to hold an event in Turkey in late April to mark the completion of solution of investment issues under this project, according to SOCAR head.

"The works under the project for construction of a refinery continue, all earthworks have already been completed," Abdullayev said.

Earlier, Turkish Denizbank expressed its readiness to allocate some $500 million for implementation of this project. The State Oil Company of Azerbaijan appealed to the Turkish bank after rejection by the European Bank for Reconstruction and Development (EBRD) and the International Finance Corporation (IFC) to finance the project.

As SOCAR Vice-President for Economic Affairs Suleyman Gasimov told Trend earlier, all the banks and interested parties have already submitted their final proposals to participate in the financing of this project.

SOCAR Turkey Yatirim JSC was established with an authorised capital of $1.9 billion and a 40 percent public share, in accordance with the decree of Azerbaijani President Ilham Aliyev on additional measures to support the participation of the Azerbaijani side in the Star refinery construction project in Turkey. The public share at 40 percent worth $760 million in JSC will be funded by the State Oil Fund of Azerbaijan (SOFAR) according to the decree.

Some $ 475 million were allocated from the State Oil Fund of Azerbaijan to finance this project.

A total project cost of SOCAR refinery in Turkey exceeds $5 billion.

SOCAR and a consortium of companies signed an EPC- contract (Engineering, procurement and construction) for the Star refinery construction in May 2013.

An alliance of Tecnicas Reunidas SA, Saipem SpA, GS Engineering & Construction Corp and Itochu companies became the winner of the tender for the refinery construction.

It is planned to process such crude oil as Azeri Light, Kerkuk and Urals at the refinery.

The annual naphtha production volume, used by Petkim as the main raw material, will hit 1.66 million tons at the Star refinery. Currently, more than 80 percent of Petkim's naphtha needs are ensured through imports. After a new refinery is commissioned, the dependence on imports will be reduced to zero.

Along with naphtha, the new refinery will produce diesel fuel with ultra-low sulfur to the amount of 5.95 million tons, aviation kerosene - 500,000 tons, reformate - 500,000 tons, petroleum coke - 630,000 tons, liquefied gas - 240,000 tons, mixed xylene - 415,000 tons, olefin LPG - 75,000 tons and 145,000 tons of sulfur. The refinery will not produce petrol and fuel oil.

The refinery is planned to be commissioned in 2017.

Translated by L.Z., N.H.

Follow us on Twitter @TRENDNewsAgency