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Azerbaijan enters Turkish gas distribution market [UPDATE]

30 January 2019 19:13 (UTC+04:00)
Azerbaijan enters Turkish gas distribution market [UPDATE]

By Leman Mammadova

Azerbaijan’s state oil company SOCAR has acquired EWE Turkey Holding, owned by the German energy company EWE AG, Trend reports with reference to the company Jan. 30.

Together with the holding, SOCAR acquired the holding’s assets - Bursagaz, Kayserigaz, Enervis, EWE Enerji and Millenicom. The deal will be completed after approval by an anti-monopoly authority and other responsible structures of Turkey.

SOCAR President Rovnag Abdullayev said that the acquisition of the holding will allow SOCAR to enter the end-user market directly.

Abdullayev said that the acquisition of gas distribution business will complement the investment chain of SOCAR in Turkey. Entering Turkey’s gas distribution market is a strategic step from a commercial point of view and completes the entire chain of production, transportation and distribution of gas, he noted.

He said that since 2013, SOCAR has been annually supplying 1.2 billion cubic meters of gas to Turkey, and the commissioning of TANAP last year created favorable conditions for the gas supply to Turkey.

“We will continue exploring other opportunities in the market,” Abdullayev added.

Earlier, EWE AG told Trend that the decision on the possible sale of its assets in Turkey is related to the optimization of the company's activity.

EWE Turkey Holding has been operating in Turkey since 2007 and is the fourth biggest supplier of natural gas in Turkey. In 2017, the company’s turnover amounted to almost 2.4 billion Turkish liras.

SOCAR is one of the world's 50 largest oil companies aimed at ensuring the energy security of Azerbaijan. SOCAR is the sole producer of petroleum products in Azerbaijan owning over 370 filling stations in Georgia, Ukraine, Romania and Switzerland.

SOCAR carries out its activity in Turkey through SOCAR Turkey. So far, SOCAR Turkey has invested over $14 billion in the Turkish economy. Meanwhile, 5,000 people work in the company, while the export potential reaches $3 billion.

Earlier, BP and SOCAR Turkey signed an agreement to evaluate the creation of a joint venture that would build and operate a world-scale petrochemicals complex in Turkey.

The start of construction of a new petrochemical complex SOCAR in Turkey is scheduled for the second half of 2019. The enterprise is expected to be commissioned at the end of 2022.

The facility would produce 1.25 million tons per annum (tpa) of purified terephthalic acid (PTA), 840,000 tpa paraxylene (PX) and 340,000 tpa benzene.

The investment cost of the joint project will be approximately $1.5-2 billion.

The enterprise will be created in the Special Industrial Zone on the Aliaga Peninsula, where the STAR oil refinery and Petkim petrochemical complex also operate today, owned by SOCAR Turkey.

SOCAR has a controlling stake (51 percent) in the Petkim petrochemical complex since 2008. Petkim Petrochemical complex, a subsidiary of SOCAR in Turkey, produces plastic packages, fabrics, detergents, and is the sole Turkish manufacturer of such products, a quarter of which is exported. The complex includes 14 factories producing 20 different types of products.

STAR is the biggest investment made by private sector in Turkey.

Star Oil Refinery that is the first Turkey-specific Industrial Zone opened in October 2018. Refinery will supply Petkim with raw materials. SOCAR Turkey Energy A.S. earlier reported that STAR will reduce Turkey’s annual deficit by about $1.5 billion. STAR refinery will meet more than 25 percent of the processed oil products need of Turkey upon its startup. Certified with the first investment incentive granted by Turkey, STAR Refinery will eventually reduce the foreign-dependency of the country.

SOCAR Turkey Energy continues to boost its economy and industry with strategic investments, moving forward rapidly every year to become Turkey's largest industry group.

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