Need for oil refining in Turkey growing - SOCAR Turkey Enerji

Business Materials 23 September 2014 12:51 (UTC +04:00)

Baku, Azerbaijan, Sept.23
By Rufiz Hafizoglu - Trend:

The need for refineries in Turkey is growing, said the president of SOCAR Turkey Enerji (Turkish unit of the State Oil Company of Azerbaijan) Kenan Yavuz, the Turkish newspaper 24saatgazetesi reported Sept.23.

He said that Turkey needs at least one more refinery.

Yavuz also noted that the construction of the Star refinery is one of the strategic goals.
The total cost of the construction of SOCAR refinery in Turkey exceeds $5 billion. In accordance with the decree of Azerbaijani President Ilham Aliyev on additional measures to support the participation of the Azerbaijani side in the construction of the Star refinery in Turkey, SOCAR Turkey Yatirim joint-stock company was established with an authorized capital of $1.9 billion (a 40 percent equity participation of the state). On the basis of the decree the government share (40 percent or $760 million) in the Joint-Stock Company will be financed by the State Oil Fund of Azerbaijan.

SOCAR signed loan agreements totaling $3.29 billion with around 23 financial institutions in the Turkish city of Istanbul on June 6, as part of constructing a new Star refinery in Turkey. 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.

The annual naphtha production volume, used by Petkim as the main raw material, will hit 1.66 million metric tons 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 metric tons, aviation kerosene - 500,000 metric tons, reformate - 500,000 metric tons, petroleum coke - 630,000 metric tons, liquefied gas - 240,000 metric tons, mixed xylene - 415,000 metric tons, olefin LPG - 75,000 metric tons and 145,000 metric tons of sulfur. The refinery will not produce petrol and fuel oil.

Earlier, Yavuz said that the company is considering the possibility of entering of a new partner into the shareholding structure of the Star refinery.

He added that the new partner of SOCAR Turkey Enerji in this project can become both foreign and local companies.

"The share of the new partner in the Star refinery project will not exceed 10-15 percent," Yavuz said.

At present, the equity allocation in the project is as follows: 60 percent is owned by Rafineri Holding A.Ş. (100 percent owned by SOCAR Turkey Enerji A.Ş.), which had previously acquired all the remaining 18.5 percent equity of Turcas Petrol in the project, and 40 percent belongs to SOCAR.