Azernews.Az

By Aynur Karimova

Azerbaijan's state energy giant SOCAR will complete all tender procedures within the framework of the project to construct a cogeneration unit (Petkojen) in Turkey by the end of 2015, Zaur Gahramanov told journalists on November 5.

“We expect to complete all tenders within the framework of this project by the end of 2015 and to start construction of the facility in 2016,” the deputy head of the SOCAR Department of Investments said. “Construction work will take about two years.”

He further noted that the commissioning of the unit would make it possible to not only provide the Petkim oil and chemical complex and Star refinery with electricity but also to sell part of the electricity to the residents of Izmir City.

Petkojen is SOCAR's first step in the electricity sector, Gahramanov said, adding that the issue of financing this project was still open.

“We are in talks with Turkish banks, the European Bank for Reconstruction and Development, and the European Investment Bank. The Chinese side has also shown interest in the project," he said.

SOCAR Turkey Enerji intends to acquire a coal-fired thermal power plant with a capacity of 300 megawatts.

SOCAR Power has a 10-year project in Petkim with a capacity of 1,500 megawatts. All necessary permissions were obtained for purchasing a 300-megawatt coal-fired power plant from the state. Negotiations are underway with the banks to secure the tender process and finance the project. The first phase of the cogeneration plant's construction will be completed in 2016. Thus, up to 30 percent of current energy consumption will be saved up.

Petkim peninsula’s need for electric and steam energy will increase fourfold by 2023.

Int'l financial institutions could finance Azerbaijan's share in SGC

Touching upon the Southern Gas Corridor project, Gahramanov said Azerbaijan could attract international financial institutions to finance its share in this project.

“A 51-percent share in the Southern Gas Corridor closed joint-stock company is owned by Azerbaijan’s Ministry of Economy and Industry, while 49 percent belongs to SOCAR,” he noted.

The SOCAR official also stressed that the company is currently holding talks with institutions such as the European Investment Bank, the International Finance Corporation, and the European Bank for Reconstruction and Development to attract loans.

"Currently, there are good conditions on the world market for attracting funds at a low interest rate," he stated. “Loans will be attracted if they are effective and beneficial. Azerbaijan’s share in financing the $45 billion project is $14 billion, of which $7 billion can be in the form of loans.”

The Southern Gas Corridor project envisages the transportation of gas extracted at the giant Shah Deniz field in the Azerbaijani sector of the Caspian Sea. Shah Deniz Stage 2 gas will make a 3,500 kilometer journey from the Caspian Sea to Europe. This requires an upgrade of the existing infrastructure and the development of a chain of new pipelines.

The existing South Caucasus Pipeline will be expanded with a new parallel pipeline across Azerbaijan and Georgia, while the Trans-Anatolian pipeline will transport Shah Deniz gas across Turkey to meet the Trans-Adriatic Pipeline, which will take gas through Greece and Albania into Italy.

The Southern Gas Corridor is set to change the energy map of the entire region, connecting gas supplies in the Caspian Sea region to markets in Europe for the very first time.

The first gas supplies through the corridor to Georgia and Turkey have been given a target date of late 2018. Gas deliveries to Europe are expected just over a year after the first batch of gas is produced offshore in Azerbaijan.

The Southern Gas Corridor pipeline system has been designed to be scalable to twice its initial capacity to accommodate additional gas supplies in the future.

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Aynur Karimova is AzerNews’ staff journalist, follow her on Twitter: @Aynur_Karimova

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