Azernews.Az

By Gulgiz Dadashova

The internal standard of profitability of the project on construction of a new oil and gas processing and petrochemical complex (OGPC) will amount to 13 percent, and the commissioning of the facility is planned for 2021, President of Azerbaijan's state energy company SOCAR Suleyman Gasimov said, SOCAR Plus magazine reported.

The project envisions construction of a petrochemical enterprise with capacity of 1.7 million tons of finished products, an oil refinery with capacity of 10 million tons per year as well as a gas processing plant with capacity of 10 billion cubic meters per year.

Gasimov said the payback period of the complex will be 7-8 years. These figures correspond to those on similar projects implemented in the whole world.

The cost of the project, determined based on a feasibility study, amounts to $17.1 billion, including accrued interest on loans which were attracted during the construction work.

According to Gasimov, the financing of about 30 percent of the project cost is to be carried out at the expense of capital stock (about $5 billion), and 70 percent -- at the expense of loan capital (nearly $12 billion).

"Around 90 percent of the charter capital falls to the state and will be financed by Azerbaijan's oil fund SOFAZ (in the amount of nearly $4.6 billion), and the remaining 10 percent (nearly $0.5 billion) -- by SOCAR. It is expected that the loan capital will be financed by foreign banks and -- if necessary -- by SOFAZ," Gasimov said.

It is planned to produce around 3 million tons of petrol and nearly 3.6 million tons of diesel fuel per year at the OGPU. The products will meet the Euro-5 standard. In addition, it is planned to produce A-1 jet engine fuel (about 1.7 million tons) which complies with the advanced Western standards, and other oil products. Moreover, in order to create additional value, it is envisaged to produce nearly 1.7 million tons of export-oriented petrochemical products.

"It is planned that around 85-90 percent of the total volume of polyethylene (about 880,000 tons per year), polypropylene (around 780,000 tons per year) and butadiene (about 80,000 tons per year), which are produced in the petrochemical plant, will be exported to the Turkish, as well as to European and Asian markets," Gasimov said.

Azerbaijan sees growth in the consumption of petroleum products year on year, but SOCAR has assured that available processing enterprises will provide the country with the required amount of oil products until the new complex comes on stream.

Currently, oil products are produced at two Baku refineries with total capacity of 20 million tons of oil a year. Both refineries are part of SOCAR, which annually processes about 6 million tons of oil from onshore and offshore fields on its own.

Around 4.8 million tons of petroleum products were delivered to the Azerbaijani market in 2012, 8.8 percent more than in 2011.