Azernews.Az

By Gulgiz Dadashova

Russian oil is now considered as a raw material for the oil refinery, which the Azerbaijani state energy company SOCAR plans to build in Kyrgyzstan.

President of the Association of Oil Traders of Kyrgyzstan Zhumakadyr Akeneev said that the SOCAR refinery to be built in the Tokmak city may refine the Russian oil.

"Now talks are underway with Russia and Kazakhstan on oil supply to the refinery," Akeneev said.

Akeneev said the source of raw material for processing at the refinery should be resolved in order to launch the refinery construction.

He went on to say that Azerbaijan has transferred authority the Kyrgyz side to determine the source of raw materials.

"Azerbaijan is ready to build the plant, and as soon as Kyrgyzstan decides on the raw materials, the group from Azerbaijan will arrive and will continue the work," Akeneev said.

The research and evaluation showed that the Azerbaijani oil transportation to Kyrgyzstan in case of the construction of SOCAR refinery here is not economically viable. Thus, attraction of oil from neighboring countries, ie Russia and Kazakhstan production become a necessity to ensure the economic viability of oil refining at the refinery.

Akeneev said Kyrgyzstan is in talks with Rosneft on the issue, and representatives of the Russian company will come to the country for talks by late May.

He believes that the issue of infrastructure for the oil supply can also be resolved.

Supplies from Russia are possible without additional infrastructure, as now Russia is the main oil supplier to Kyrgyzstan, he said.

Akeneev also spoke about the possibility of Chinese oil supply to the SOCAR refinery.

China, which is now launching its plant in Kyrgyzstan, is building a pipeline to transport its oil from Kazakhstan.

"We can agree on the sale of this oil to Kyrgyzstan," he said.

Akeneev said once the issue of supply of raw materials is solved the parties immediately start construction of the plant.

The agreement on construction of the SOCAR's oil refinery in Kyrgyzstan was reached by the parties at a meeting of Kyrgyz President Almazbek Atambayev and SOCAR President Rovnag Abdullayev in January 2012.

The estimated cost of the refinery with an annual capacity of 2 million tonnes (about 40,000 barrels per day is about $250 million. The refinery will reduce the Central Asian country's energy dependence on one source.

SOCAR is the only producer of oil products in the country (it has two refineries on its balance sheet) and also owns petrol stations in Azerbaijan, Georgia and the Ukraine. Last year SOCAR purchase network of gas filling stations in Switzerland. SOCAR is co-owner of the largest Turkish petrochemical complex Petkim. The company carries out oil trade in various regions of the world through SOCAR Trading.