Reason for Turcas Petrol stake sale in Star refinery construction project announced

Photo: Reason for Turcas Petrol stake sale in Star refinery construction project announced / Oil&Gas

Baku, Azerbaijan, May 22

By Rufiz Hafizoglu, Emil Ismayilov - Trend:

Turcas Petrol sold its entire 18.5 percent equity stake in the Star refinery in the province of Izmir to Rafineri Holding A.Ş. (fully owned by SOCAR Turkey Enerji A.Ş.), Turcas Petrol told Trend on May 20.

"The parties reached an agreement on the sale of this share for $59.39 million following the negotiations," according to the company.

"The Star refinery construction project is strategic," the company said. But additional funds are required because the amount of funds necessary for the project implementation is $ 5.6 billion. This does not correspond to the company's revenue forecast and therefore the reason it decided to sell its stake in the project.

So far, the volume of Turcas Petrol's investments in the refinery construction project was 116.3 million Turkish liras, the company said.

At present, the sharing arrangement in the project is as follows: 41.5 percent share in the Star refinery is owned by Rafineri Holding A.S. (100 percent owned by SOCAR Turkey Enerji A.S, 18.5 percent - Turcas Petrol and 40 percent - SOCAR.

In the case of SOCAR`s purchase of a Turcas Petrol share in the project, the oil company`s share will increase to 60 percent, according to the Turkish media.

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

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 tonnes 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 tonnes, aviation kerosene - 500,000 tonnes, reformate - 500,000 tonnes, petroleum coke - 630,000 tonnes, liquefied gas - 240,000 tonnes, mixed xylene - 415,000 tonnes, olefin LPG - 75,000 tonnes and 145,000 tonnes of sulfur. The refinery will not produce petrol and fuel oil.

The official exchange rate on May 20 is 2.0981 TRY/USD.

Edited by C.N.

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