SOCAR inks agreement on refinery construction in Turkey
By Nigar Orujova
SOCAR Turkey, a subsidiary of Azerbaijan's state oil company SOCAR, has signed an agreement with a consortium that intends to build the Star refinery worth $4 billion in Turkey for Petkim petrochemical complex, which is co-owned by SOCAR, Petkim told Azerbaijan's Trend news agency on May 20.
The consortium, which won a tender for the construction of the Star refinery, consists of the Spain-based company Tecnicas Reunidas, Italian Saipem, South Korean GS Engineering & Construction and Japan's Itochu.
The Star refinery's processing capacity is expected to be 10 million tons of oil and it will be capable of refining such oil grades as Azeri Light, Kirkuk and Urals. Annual production at the refinery will equal 1.6 million tons of naphtha, which aims to eliminate Petkim's dependence on imports of this type of oil product.
Along with naphtha, the Star refinery will also produce 5.9 million tons of diesel fuel with ultra-low sulphur, 500 tons of aviation fuel, 630,000 tons of petroleum coke, 240,000 tons of liquefied petroleum gas, 415,000 tons of mixed xylenes, 75,000 tons of olefin liquefied petroleum gas and 145,000 tons of sulphur.
Some 30 percent of the construction of the refinery will be financed by the shareholders' assets, which will amount to about $1.8 billion, and the rest through bank loans.
The total capacity of the Star refinery will comprise 10 million tons and petroleum product output will be aimed at meeting the needs of Petkim and the Turkish market.
Azerbaijan and SOCAR will be the largest direct investor in Turkey's history with their current and future projects. In December, the company said that the total investments of the Azerbaijani state energy company in Turkey's economy from 2008 to 2018 will reach $17 billion.
SOCAR is one of the world's most well-established oil companies, active in Turkey since May 30, 2008.
SOCAR Turkey aims to reduce dependence on foreign production and exports in Turkey by providing high value-added products produced inside the country.
STAR Refinery is scheduled for commissioning in 2015 and it will contribute significantly to the economy of the region and country by creating employment and increasing competitiveness.