SOCAR reveals cost of new gas chemical complex in Azerbaijan

Oil&Gas Materials 1 July 2016 11:35 (UTC +04:00)

Baku, Azerbaijan, July 1

By Maksim Tsurkov – Trend:

The cost of construction of a new gas chemical complex in Azerbaijan will be around $4 billion, a high-ranking official of the State Oil Company (SOCAR) told reporters.

The official said that it is planned to construct the gas processing and petrochemical plants as part of the Oil and Gas Processing and Petrochemical Complex (OGPC) project.

“In order to reduce the expenditures on the project’s implementation, it was decided to reduce the capacity of the gas processing plant from 12 billion cubic meters to 10 billion cubic meters of gas per year,” said SOCAR’s representative. “Thanks to this, the project’s cost is now estimated at $4 billion.”

Earlier, SOCAR was planning to attract Japanese companies as partners in construction of the complex.

“The talks with Japanese companies were unsuccessful, as they said the project is not attractive for them due to high expenditures,” said the company representative. “Therefore, SOCAR signed memorandums of intention with China National Petroleum Corporation (CNPC), Russia’s Gazprombank and Agency for Export Credit and Investment Insurance (EXIAR), as well as Italian export credit agency SACE on the gas chemical complex project.”

“Currently, we are evaluating all the proposals in order to choose the most acceptable one,” said SOCAR’s representative. “We also take into account that if the oil prices rise, the Japanese companies will reconsider their participation in the project.”

The OGPC will be located 60 kilometers from Baku and will consist of three processing enterprises and a thermal power plant.

Earlier, it was reported that the cost of construction of OGPC is $17.1 billion, including the interest rates on loans taken during the construction period.. Some 30 percent of the project's cost is planned to be financed with the authorized capital (nearly $5 billion), while 70 percent- with the borrowed capital (about $12 billion).


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