By Aynur Jafarova
Azerbaijan's state energy company SOCAR has signed loan agreements worth $3.29 billion with 23 financial institutions in Istanbul, Turkey on June 6.
The agreements were signed as part of project of construction of new Star refinery in Turkey's Izmir city, Trend Agency reported on June 6.
The signing ceremony was attended by Turkish Energy and Natural Resources Minister Taner Yildiz, Science, Industry and Technology Minister Fikri Ishik, Azerbaijan's Minister Energy Natig Aliyev, Economy and Industry Minister Shahin Mustafayev, SOCAR head Rovnag Abdullayev, head of Azerbaijan's state oil fund SOFAZ Shahmar Movsumov, chairman of the board of Petkim Petrochemical Complex Vagif Aliyev, SOCAR Vice-President of Economic Issues Suleyman Gasimov and President of SOCAR Turkey Energy Kenan Yavuz.
Around $2.69 billion of the total volume of the loans will be spent during an 18-year period with a grace period of four years. The rest money amounting to $600 million will be spent during a 15-year period with the grace period of four 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 some 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 the project.
Star refinery, with an annual capacity of 10 million tons, 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. The 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's and country's economy by creating job opportunities and increasing competitiveness.
Currently, 60 percent share in the Star refinery is owned by Rafineri Holding A.S., and 40 percent - SOCAR.