SOCAR signs loan agreements as part of constructing Star refinery in Turkey

Photo: SOCAR signs loan agreements as part of constructing Star refinery in Turkey  / Oil&Gas

Baku, Azerbaijan, June 6

By Emil Ismayilov - Trend:

Azerbaijan's State Oil Company (SOCAR) signed loan agreements totaling $3.29 billion with around 23 financial institutions in the Turkish city of Istanbul on June 6, SOCAR Turkey Energy said.

The agreements have been signed as part of constructing a new Star refinery in Turkey.

The signing ceremony was attended by Turkish Minister of Energy and Natural Resources, Taner Yildiz, Minister of Science, Industry and Technology, Fikri Ishik, Azerbaijan's Minister of Energy, Natig Aliyev, Minister of Economy and Industry of Azerbaijan, Shahin Mustafayev, the head of Azerbaijan's State Oil Company (SOCAR), Rovnag Abdullayev, head of Azerbaijan's State Oil Fund (SOFAZ), Shahmar Movsumov, the chairman of the board of Petkim petrochemical complex and the head of SOCAR Investment Division, Vagif Aliyev, SOCAR Vice-President of economic issues, Suleyman Gasimov and President of SOCAR Turkey Energy, Kenan Yavuz.

As previously reported, around $2.69 billion of the total volume of the loans has been issued for an 18-year period (the grace period is four years) and the remaining $600 million - for a 15-year period with the grace period of four years.

The loan package consists of the funds of export-import banks (Spain, Italy, Japan, U.S. and the Republic of Korea), some 16 foreign trade and investment banks, as well as one local bank.

SOCAR Turkey Yatirim JSC (with an authorized capital of $1.9 billion and a 40 percent public share) was established in line with Azerbaijani President Ilham Aliyev's decree on additional measures to support the participation of Azerbaijan in the Star refinery construction project in Turkey.

The government's 40 percent share (worth $760 million) in the SOCAR Turkey Yatirim will be funded by the State Oil Fund of Azerbaijan (SOFAZ), according to the decree.

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

The total cost of the project on the construction of SOCAR's refinery in Turkey exceeds $5 billion.

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 winners of the tender for the refinery construction.
It is planned to commission the plant in 2018.

The annual naphtha production volume, used by Petkim as the main raw material, will hit 1.66 million tonnes at the Star refinery.

Along with naphtha, the new oil 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.

Edited by CN

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