Azernews.Az

By Aynur Jafarova

Azerbaijan's state energy company SOCAR has signed several agreements with financial institutions as part of its project to construct a new refinery in Turkey's Izmir city.

The agreements' total worth is $3.5 billion, local Turkish media reported on May 8.

Some $3 billion out of the total amount will come from export-import banks (Spain, Italy, Japan, the U.S. and South Korea) and 15 commercial foreign banks. Some $500 million will be provided by the Turkish Garanti Bankasi.

The loans will be allocated for a period of 18 years.

SOCAR Turkey Yatirim JSC was established with an authorized capital of $1.9 billion and a 40 percent public share. It came after Azerbaijani President Ilham Aliyev issued a decree on adopting additional measures to support the participation of Azerbaijan in the Star refinery construction project in Turkey.

The government's 40 percent share worth $760 million in the SOCAR Turkey Yatirim will be funded by Azerbaijan's state oil fund SOFAZ.

Some $475 million were allocated by SOFAZ to finance this project.

With an annual capacity of 10 million tons, Star refinery will be capable of refining oil grades such as Azeri Light, Kirkuk, and Urals. The oil refinery is planned to be commissioned in 2018.

Some 16 billion cubic meters of gas will be produced in the Shah Deniz Stage 2 development and exported to energy markets. This figure will be increased by one billion cubic meters per year.

Estimated at $5.5 billion, the refinery is mostly intended to create a resource base for the chemical company Petkim Holding. It will contribute significantly to the region and country's economy by creating job opportunities and increasing competitiveness.