Financing secured for Turkish refinery

May 30, 2014

SOCAR Turkey Energy AS, a joint venture of State Oil Co. of Azerbaijan Republic and the Turkish government, has secured additional funding to proceed with construction of the planned 214,000-b/d Socar Turkey Aegean Refinery (Star) in Aliaga, Turkey.

OGJ editors

This story was updated on June 3 to correct information related to ownership.

Star Refinery AS, Istanbul, has secured additional funding to proceed with construction of the planned 214,000-b/d Socar Turkey Aegean Refinery (Star) in Aliaga, Turkey (OGJ Online, Dec. 14, 2010).

SOCAR Turkey Energy AS, the Turkish arm of State Oil Co. of Azerbaijan Republic, on May 30 signed loan agreements amounting to $3.29 billion with 23 export credit agencies, commercial banks, and development banks to finance the Star refinery project, according to a notice posted the same day to Turkey’s Public Disclosure Platform.

Previously, the State Oil Fund of the Republic of Azerbaijan (Sofaz), between January and December 2013, allotted $474 million to construction-related costs for the Star refining complex (OGJ Online, Jan. 28, 2014), which followed the US Export-Import Bank’s authorization of a $640.7 million direct loan to finance export of US equipment for the construction of the complex (OGJ Online, Dec. 6, 2013).

SOCAR Turkey owns 51% of Petkim, operator of a petrochemical complex with which the new refinery will be integrated (OGJ Online, Dec. 6, 2013).

The planned refinery will include a 66,000-b/d hydrocracker, a 40,000-b/d delayed coker, and a 28,000-b/d continuous catalytic regeneration reformer.

In addition to a hydrogen unit able to produce 3.84 million cu m/day, the complex also will have hydrotreating capacities of 20,000 b/d for naphtha, 26,000 b/d for kerosine, and 68,000 b/d for diesel.

The refinery, which will cost a total of about $5.6 billion, is scheduled to be commissioned in 2018, according to a May 29 from Vinson & Elkins LLP, who served as international legal advisor to Star Refinery on the signing of the finance documents for the project, including the common terms agreement and all the loan facility agreements.

The full notice to proceed with construction activities was due to the EPC contractor—a consortium of companies comprised of Spain’s Tecnicas Reunidas, Italy’s Saipem, Korea’s GS, and Japan’s Itochu—following the May 29 announcement, Vinson & Elkins said.