TBILISI, April 23 Azeri state oil company SOCAR
plans to sign contracts with a consortium of banks on financing
for its Turkish oil refinery project on May 5, SOCAR's
vice-president said on Wednesday.
SOCAR, which owns Turkish petrochemical company Petkim , is
building the $5.5 billion Star refinery in partnership with
Turcas Petrol to supply feedstock to Petkim and cut Turkey's
dependence on imported refined products.
"We will sign (a) funding agreement worth a total of $3.5
billion with foreign export-import banks as well as Turkey's
Denizbank," Suleiman Gasymov told journalists.
He said that Denizbank, owned by Russia's Sberbank
, would lend SOCAR $500 million.
The funding agreement with the consortium has a maturity of
10 years with a four-year grace period.
Denizbank replaced the World Bank's International Finance
Corporation (IFC) and the European Bank of Reconstruction and
Development (EBRD) which withdrew from the consortium financing
the refinery earlier this year.
SOCAR plans to use $2 billion of its own equity for the
It signed a $3.46 billion engineering procurement and
construction contract in May last year with a consortium
comprising Tecnicas Reunidas, Saipem, GS Engineering &
Construction and Itochu Corp.
Turkey has a surplus of gasoline but is heavily dependent on
imports of diesel, which are expected to rise towards 20 million
tonnes annually from around 12 million last year.
Turkey's only refiner Tupras has four plants across the
country with a combined oil processing capacity of 28 million
The Star plant in Aliaga on the Aegean coast is expected to
have an annual capacity of 10 million tonnes, 1.6 million tonnes
of which would be naphtha which could feed the Petkim plant. It
will also produce diesel, jet fuel and LPG.
The project is expected to come online in mid-2017.
SOCAR owns 81.5 percent of the Aegean refinery project at
Aliaga, with Turcas owning the remaining 18.5 percent.
(Reporting by Nailia Bagirova; Writing by Margarita Antidze;
Editing by Mark Potter)