Canadian EDC company is leading loan organizer for SOCAR’s refinery in Turkey (UPDATE)
details added (first version posted at 12:50)
Baku, Azerbaijan, Dec. 12
By Emil Ismayilov, Azad Hasanli - Trend:
"Export Development Canada" (EDC) company has become a leading organizer of a syndicated loan worth $ 3.3 billion allocated by the consortium of banks to implement SOCAR's STAR oil refinery construction project in Turkey, the Canadian company said.
EDC has allocated $ 150 million as part of this transaction, the statement says.
"The successful completion of this transaction testifies to the EDC experience in structuring due to the project financing complexity," the vice president for structure and project finance Sven List said. "It creates conditions for further simplification of trade procedures in Turkey."
"The company will focus on this project at each stage of exploration, drilling and development of SOCAR's supply chain, including infrastructure and transportation," EDC chief representative in Turkey Zenon Woychyshyn said.
"EDC's participation in this transaction allowed establishing constructive relations with SOCAR," he said. "Of course, this will open new opportunities in this area in the future."
Moreover, 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.
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.
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 (with 40 percent share of the state).
Under the decree, the government's share (40 percent or $760 million) in the joint-stock company will be financed by the State Oil Fund of Azerbaijan.
At present, the share distribution 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 share of Turcas Petrol in the project, and 40 percent belongs to SOCAR.
The total cost of the construction of SOCAR refinery in Turkey exceeds $5 billion.
The refinery is expected to be constructed in the first quarter of 2018.
The annual production of naphtha at the Star factory, used by Petkim petrochemical complex, in which SOCAR has equity participation, will account to 1.66 million metric tons as the main raw material. Currently, more than 80 percent of the needs of Petkim in the naphtha are provided by imports, and with the introduction of a new refinery the dependence on imports will be reduced to zero.
Petkim Petrokimya Holding manufactures plastic packaging, fabric, PVC and detergents being the only Turkish producer of such products. The holding exports a quarter of its products.
Emil Ismayilov is Trend Agency's staff journalist, follow him on Twitter: @Emilsmail
Azad Hasanli is Trend Agency's staff journalist, follow him on Twitter: @AzadHasanli