Societe Generale selected organizer of syndication to create new petrochemical complex in Azerbaijan

Oil&Gas Materials 17 March 2010 20:13 (UTC +04:00)

Azerbaijan, Baku, March 17 / Trend , I.Khalilova, E. Ismailov/

Implementing the first phase of construction of a new complex to produce petrochemical products and fertilizers is estimated at $6 billion, said the head of Azerikimya State Company Majid Karimov. The complex includes construction of 19 plants, of which 10 will be constructed at the first phase.

"The cost of implementing the first phase of the project totals about $6 billion, and the next phase will be implemented at the expense of profits," said Karimov.

According to him, $2 billion in the first phase will be provided by the investors, who will be directly involved in this project, and the remaining $4 billion will be attracted from credit resources. Loans are expected to be attracted from banks and export-import agencies, particularly from the British export-import agencies, and the U.S. Export-Import Bank.

Already a bid was announced to determine the banks that will participate in financing this project. Organizer of syndication is the French Societe Generale, which is also a financial consultant of the project. Some 30 percent of the cost will be provided at the expense of investments and 70 percent of the cost - credit resources.

According to Kerimov, in parallel, work is underway to prepare a report on the environmental impact. The report is prepared by the British ERM Company, which earlier was the winner of the bid. The work on the preparation of the report began in November last year, and by mid this year is expected to be completed, that is, they are envisaged for 6-9 months. Finished report will be submitted to banks, which will be attracted to participate in the syndication, because while deciding on granting loans to financial institutions, will be based on the data from this report.

Karimov said that to start construction work it is necessary to obtain an environmental report, license and contracts should be prepared, contracts with buyers of products should be signed. Also government permission should be obtained to allocate the required volume of gas as raw material for production at enterprises of the complex. To cover the needs of plants for the raw material, 60-kilometer pipeline from the gas processing plant of SOCAR (State Oil Company of Azerbaijan), located in Garadagh, will be constructed in the direction of Sumgayit.

The gas will be provided to the company on domestic prices, but products will be sold at prices set in world markets," said Karimov. Europe, India, Turkey and South-East Asia are considered as markets for products.

A distinctive feature of the future complex is that these plants will be based on international licenses, including licenses to be used for chemical production f companies Exxon, BP, Basel, Eni. This requires achieving contracts with these sides and consent to receive these licenses.

The complex will be designed to produce 700,000 tons of polyethylene of high and low pressure, 130,000 tons of polypropylene, 40,000 tons of benzene, 110,000 tons of styrene and other petrochemical products.