SOCAR’s experience in Turkey will back decision to construct new processing complex in Azerbaijan
Azerbaijan, Baku, Jan. 2 / Trend E.Ismayilov /
SOCAR (State Oil Company of Azerbaijan), intends to use the experience it has acquired in the course of preparation for the construction of a refinery in Turkey, as well as during implementation of the project on creating a new complex for the processing of oil, gas and petrochemicals in Azerbaijan. This was reported by head of SOCAR Rovnag Abdullayev on Sunday.
According to him, within the tender announced for the construction of the Star oil refinery in Turkey, SOCAR was able to get very good deals such as low cost, compared to the expected price and shorter payback periods.
"Within a month SOCAR plans to sign a contract with the designated contractor to begin construction work next year. The most experienced global law firms are being attracted to preparation of the contract," Abdullayev said.
The experience gained in construction of a refinery in Turkey will let the Azerbaijani side adopt the most cost-effective solution for construction of a new processing complex in Azerbaijan, the head of SOCAR said.
Up to $6 billion is allocated for construction of Star refineries in Turkey. The work will be financed by shareholders' funds (30 per cent), which will make approximately $1.8 billion and by bank loans.
The main purpose of construction of this enterprise is the provision of raw materials for the Petkin petrochemical complex in which SOCAR has equity participation.
Within the project on the construction of refineries, Turkey granted exemption from payment of value added tax and customs duties. Overall, tax simplification up to 90 percent is expected. Alongside, during the plant construction the state will provide a VAT refund.
Within a period of seven years Turkey will pay the minimum amount of insurance to refinery employees and allocate $50 million (five per cent of the total investment) as aid for the payment of interest.