* SOCAR Turkey says secured fresh financing for $500 mln
* Sources say Denizbank is the lender
* SOCAR Turkey sees no delay in the project
(Adds details, background)
By Evrim Ergin
ISTANBUL, March 18 Azeri state oil company SOCAR
has secured financing for its Turkish oil refinery project after
two lenders dropped out, it said on Tuesday.
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.
The World Bank's International Finance Corporation (IFC) and
the European Bank of Reconstruction and Development (EBRD) have
withdrawn from a consortium financing the refinery, SOCAR said.
SOCAR Turkey's chief executive Kenan Yavuz told Reuters it
had agreed with a commercial bank fresh financing of $500
million to replace the EBRD and IFC share and that the funding
agreement, worth a total of $3.5 billion, was expected to be
signed by the end of March.
Yavuz declined to name the commercial bank but sources close
to the deal said it was Turkey's Denizbank, owned by
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.
The firm has said it received strong demand from banks keen
to be a part of the financing consortium, but a final signature
on the funding agreement has been delayed.
"The target is to conclude by March 31, but it could be
delayed to April as well," Yavuz told Reuters.
He dismissed suggestions of a delay in the project, slated
to come online in mid-2017, saying it was still on track.
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
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.
SOCAR owns 81.5 percent of the Aegean refinery project at
Aliaga, with Turcas owning the remaining 18.5 percent.
(Additional reporting by Ebru Tuncay, writing by Humeyra Pamuk;
Editing by Nick Tattersall and William Hardy)