(Updates with details on the financing, background)
ISTANBUL May 30 Azeri state oil company SOCAR
has signed a $3.29 billion financing deal with 23 banks and
export credit agencies for the construction of a refinery on
Turkey's Aegean coast, SOCAR's Turkish subsidiary Petkim said on
SOCAR is building the $5.5 billion Star refinery to supply
feedstock to petrochemicals maker Petkim, which will help cut
Turkey's dependence on imported refined oil products.
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.
Around $2.7 billion of the financing has a maturity of 18
years and the remaining $600 million has a maturity of 15 years,
Petkim said in a statement to the Istanbul stock exchange.
SOCAR said it would use $2 billion of its own equity for the
project but has tapped the markets for funding for the rest.
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.
Earlier this week, Petkim said it signed an agreement to buy
up to 1.6 million tonnes of naphtha feedstock from the Star
refinery. The company said it estimates the purchase agreement
will cut its raw material costs by $30 per tonne.
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
SOCAR Turkey now is the sole owner of Star refinery after
Turkish energy firm Turcas Petrol said it sold its 18.5 percent
stake for $59.39 million.
(Reporting by Humeyra Pamuk and Evrim Ergin,; Editing by Nick
Tattersall and William Hardy)