At the end of May SOCAR to hold ceremony of financial closure of Star oil refinery project in Turkey

At the end of May 2014 SOCAR plans to hold the ceremony of financial closure of the project of construction of Star oil refinery in Izmir, Turkey.

SOCAR President Rovnag Abdullayev told journalists that the issue of funding of the project has been solved and the ceremony will be held in Istanbul at the end of May.

He said Turkish Garanti Bankasi will be involved in the project funding.

SOCAR will borrow $3.5 billion from 16 foreign banks, including 15 Ex-Im banks and Garanti Bankasi to fund the oil refinery construction. Total cost of the project is $5.5 billion. $3 billion will be borrowed from 15 banks from 5 countries, including Spain, Italy, Japan, US and South Korea,  for the period of 18 years. Garanti Bankasi will allot $500 million for the period of 15 years.

As has been agreed with Garanti Bankasi, within 15 years all cash operations of Star oil refinery will be done through this bank. During this period the flow of cash through the Star oil refinery is expected to total $200 billion.

On October 25, 2011 SOCAR Turkey Enerji laid the foundation of the Star oil refinery. General contractor of the construction is the alliance of  Tecnicas Reunidas SA, Saipem SpA, GS Engineering & Construction Corp and Itochu companies with which EPC (engineering, procurement and construction) contract was signed in May 2013.

According to the decree issued by Azerbaijani President Ilham Aliyev on the extra measures to support participation of the Azeri side in the Star oil refinery project in Turkey, it was decide to create SOCAR Turkey Yatirim joint stock company (JSC) with the authorized capital of $1.9 billion and 40% share of the state. The share of the state (40% - $760 million) in the JSC will be funded by the State Oil Fund of Azerbaijan (SOFAZ). $475 million has been already allocated from the Fund to fund the project.

The capacity of the oil refinery, which is expected to be launched in 2018, will total 10 million tons of oil a year. The oil refinery will refine Azeri Light, Kerkuk and Urals types of oil.

The oil refinery will supply Petkim complex with raw materials will allow SOCAR breaking into a big Mediterranean market with its diesel fuel and aviation kerosene and raw material for the chemical industry.

SOCAR Turkey Energy company fully controls Star oil refinery’s shares.—0-