Turcas, SOCAR to seek $4bn loans for new refinery in Turkey

Turcas Petrol and State Oil Company of Azerbaijan (SOCAR) will seek as much as $4 billion in loans in the second half of 2012 to build a new refinery on the west of Turkey, Bloomberg reported with the reference to Turcas CEO Batu Aksoy.

Turcas and SOCAR are parties of the joint venture - co-owner of a petrochemical complex Petkim. SOCAR-Turcas started construction of a new oil refinery Star Rafineri AS in Turkey to meet Petkim's raw demand.

According to Aksoy, SOCAR-Turcas joint venture hired Unicredit SpA (UCG), which is holding talks with the export-import credit insurance agencies of the home countries of companies that may bid to build the oil refinery.

"The joint venture plans to inject approximately $1 billion of equity for the refinery and is seeking long-term loans for the remainder of the project. With the condition of European credit markets this isn't an easy process but we don't foresee any problems," Aksoy said in an interview.

A foundation laying ceremony of a new refinery in Izmir which will provide raw materials for Petkim was held October 25 in Izmir.

Aksoy said Star Rafineri AS is scheduled to be opened in 2015.

"Star Rafineri will make naphtha for Petkim, cutting its dependency on imports and allowing the chemicals maker to double capacity, as well as products for the local market", he said.

The new refinery will primarily focus on supplying raw material for the complex. The cost of the plant is $5.5 billion and the production capacity is 10 million tons per year. Oil produced in the factory will be directed to meet Petkin's demands, the domestic market in Turkey and the Mediterranean region.

Earlier SOCAR increased paid up capital in Socar-Turcas venture from 200 million lira to 2.4 billion lira ($1.3 billion). After increase of SOCAR's share in the venture SOCAR-TURCAS was renamed into SOCAR Turkey Enerji.