Details of credit agreement on Star oil refinery in Turkey

On May 30, 2014 SOCAR Turkey Energy company signed credit agreements with 23 financial institutions to the total amount of $3.29 billion as a part of construction of a new Star oil refinery in the Turkish city of Izmir, reads the statement placed on the Turkish web site.

The statement reads that of a total amount of credit $2.69 billion has been allotted for the period of 18 years (four years grace period) and the remaining $600 million for 15 years with the four years grace period.

The information does not disclose names of the banks involved in funding of the project. However, SOCAR’s representatives said earlier that of total amount of the credit about $2.8 billion fell to the Ex-Im Banks from Spain, Italy, Japan, USA and Korea and 15 commercial foreign banks. Another $500 million has been allotted by the Turkish Garanti Bank.

According to the decree of Azerbaijani President Ilham Aliyev on additional measures to support Azerbaijani share in Star oil refinery construction, SOCAR Turkey Yatirim joint stock company has been created with the authorized capital of $1.9 billion and 40% share of the state.  According to the presidential decree,  share of the state (40% or $760 million) in JSC will be funded by the State Oil Fund of Azerbaijan (SOFAZ).

$475 million has been already allocated from SOFAZ to fund the project. Total cost of Star oil refinery construction exceeds $5.5 billion.

In May 2013 SOCAR signed the EPC (Engineering, Procurement and Construction) contract with the consortium of the companies to build Star oil refinery. The winner of the tender was alliance of Tecnicas Reunidas SA, Saipem SpA, GS Engineering & Construction Corp and Itochu companies. It is planned to launch the oil refinery in 2018.—0—