Long-term credits to be borrowed for creation of a new petrochemical complex

SOCAR will borrow long-term credits to build a new gas refining and petrochemical complex OGPC in Azerbaijan, SOCAR President Rovnag Abdullayev told journalists yesterday.

“When the manufactured product’s price goes down, one needs to cut expenses. However, all our projects are curently at such a stage, so we cannot speak about reduction of expenses. The works on the Southern Gas Corridor project are going on, the works on construction of OGPC are at the stage of FEED and detailed designing. I have discussed this issue with Japanese big companies in Japan and they are interested in participation in the project,” Abdullayev said.

He said Japanese Ex-Im Bank has a possibility to take part in funding of the project. “All these works will be continued and long-term credits will be borrowed for the OGPC implementation,” Abdullayev added.

He also mentioned a successful implementation of SOCAR Polymer project. Construction of the plant has stated,(credit agreement has been concluded with Gasprom Bank on June 19, 2015 to the amount of $489 million for the period of 10 years) and the contract for the first installation has been concluded.

“Implementation of al the projects is going on and there are no delays. But we are careful about the risks and we manage them. We have a big group for risk management and it considers all the issues in time,” said Abdullayev.

SOCAR Polymer plant will be built at the Sumgait chemical industrial park. The plant will manufacture 180,000 tons of polypropylene and 120,000 tons of polyethylene a year. Majority of the products are planned to be sent to Turkey and Western Europe.

OGPC will be located 60 km away from Baku and consists of three refining plants and thermal power station. The complex will help to improve quality of the manufactured product, strengthen export potential of the country and help to protect environment of the capital.

The anual capacity of the oil refinery within OGPC (it is planned to be built by 2030) will be 9 million tons, gas refinery – 12 billion cub.m. and petrochemical plant – exceed 1 million tons (the capacity of the polyethylene production installation will be 800,000 tons and the installation for polypropylene production – 300,000 tons).

Total cost of the first stage of OGPC project is estimated at $7 billion ($8.45 billion with credit interest rates).—0—