SOCAR investments in Turkey to reach $17 bln in 2008-2018
By Nigar Orujova
Total investments of Azerbaijani state energy firm SOCAR in Turkey's economy from 2008 to 2018 will reach $17 billion, the company said.
The investment portfolio includes funds that will be invested in the construction of Trans-Anatolian pipeline, which will allow to transport Azerbaijani gas through Turkey to the European border, head of SOCAR Turkey Enerji Kenan Yavuz said in Istanbul during the licensing ceremony for SOCAR, Trend news agency reported.
The licenses are granted under a law on economic stimulus measures adopted by the Turkish parliament.
During the ceremony, Economy Minister Zafer Caglayan announced that the first license was granted to SOCAR, after which it was handed to the head of SOCAR Rovnag Abdullayev.
According to the license, the Turkish Economy Ministry is to provide tax incentives for the SOCAR Star refinery project in Izmir.
Exemptions from value added tax and customs duties are provided as part of the project. Overall, tax simplification up to 90 percent is planned, and the government will ensure VAT repayment during the construction of the plant.
About $6 million will be directed to the construction of the oil refinery, a senior SOCAR official said earlier. Part of the operations - about $1.8 billion, or 30 percent of the total amount - will be financed through shareholders, and the rest through bank loans.
Annual production of naphtha, which is used as the primary raw material for Petkim, the leading petrochemical company in Turkey, which is majority owned by SOCAR, will be 1.66 million tons at the Star refinery. Currently, more than 80 per cent of the Petkim naphtha needs are met through imports, dependence on which will be completely eliminated after the opening of the new refinery.
STAR Refinery is scheduled to start operating with capacity of 10 million tons of crude oil processing in 2016.
Azerbaijan and SOCAR will be the largest direct investor in Turkey's history with their current and future projects, according to the SOCAR Turkey website.