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Details of financing SOCAR urea plant project revealed (Exclusive)

Business Materials 28 September 2018 18:01

Baku, Azerbaijan, Sept. 28

By Ilkin Shafiyev - Trend:

So far, 360 million euro of credit funds has been spent for the construction of a urea (carbamide) plant of Azerbaijan’s state oil company SOCAR, the plant’s director Khayal Jafarov told Trend Sept. 28.

“The project was funded by the state budget until 2015,” said Jafarov. “Then it was decided to change the source of funding and following successful negotiations a loan agreement was signed among SOCAR and Export-Import Bank of South Korea (KEXIM), Germany’s Deutsche Bank, French Societe Generale and Italy’s UniCredit S.p.A. on export financing worth 500 million euros. It is expected that the funds will be fully spent by the end of this year.”

Jafarov also noted that negotiations continue with potential buyers of Azerbaijani urea.

“Presently, Marketing and Operations Department of SOCAR is in talks with various interested foreign companies to sell urea,” he said. “Turkey is a priority market for us.”

The cost of the project is 770-780 million euros.

The plant will produce 1,200 tons of ammonia and, subsequently, 2,000 tons of urea per day. It is planned to supply a quarter of production, that is, 150,000-200,000 tons of urea, to the Azerbaijani domestic market. The remaining part will be exported to Turkey, Georgia and the markets of the Black Sea and the Mediterranean Sea countries.

South Korea’s Samsung Engineering won the tender for the construction of the plant. Samsung Engineering acts as a general contractor of the plant’s construction, but it has no license for production of urea and ammonia, which will be by-product in the urea production process.

Therefore, the relevant licensing agreements were signed with company Haldor Topsoe (Denmark) for production of ammonia and Stamicarbon B.V. (the Netherlands) for production of urea.

Production at the plant will be environmentally friendly. The plant will have an autonomous electricity system. The plant will consume 25-26 MW of electricity per hour.

The urea plant will require 1.3 million cubic meters of gas per day for operation at full capacity.

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