29 May 2018 17:48

SOCAR may build third petrochemical plant in Turkey for $1.6-$2.2 bln

BAKU. May 29 (Interfax) - SOCAR Turkiye Enerji, the Turkish subsidiary of State Oil Company of the Azerbaijani Republic (SOCAR), expects to build another petrochemical complex in Turkey at an estimated cost of $1.6 billion-$2.2 billion, company head Zaur Gahramanov told journalists on Monday.

"At the end of the first quarter, the end of April 2019, a final investment decision on implementation of this project will be made. Construction of the complex is planned to begin in the middle of the same year and be completed by the end of 2022. The launch of the new complex is stipulated in 2023. It is premature to talk about project costs for now, but initially they are estimated at $1.6 billion-$2.2 billion," Gahramanov said.

The facility will have capacity for 1 million tonnes of PET (polyethylene terephthalate) and polypropylene.

Design work on the new complex is currently underway and will be completed at the end of 2018. In addition, talks were conducted on acquisition of licenses for the project with BP and Axens, and the necessary licenses have already been received.

SOCAR Turkiye Enerji said major petrochemical concerns have shown interest in the project. "Turkey is a very interesting market because many companies are interested in our new project. We are negotiating with a number of global petrochemical companies. However, the investment decision on construction of the new complex will be taken irrespective of whether the project is implemented by SOCAR alone or in partnership with others," Gahramanov said.

Having other companies participate would not only make it possible to share the financial risks, but increase the design capacity of the enterprise.

"As for project financing, then for this purpose both SOCAR Turkiye Enerji internal resources, using revenue from the Petkim complex, and resources raised externally could be used," he said.

Petkim Petrokimya Holding currently covers just 17% of Turkey domestic demand for petrochemical output. The complex cannot produce more "simply in physical terms," he said. Construction of the new complex would make it possible to meet 40% of domestic petrochemical demand.

"In this connection, the Turkish authorities are very interested in implementation of such projects and are giving us great support. We are currently negotiating with the Turkish side on creation of special industrial zones, including Petkim Petrokimya Holding, Star Oil Refinery and the new petrochemical complex. I think that we might be able to announce a positive decision on this as early as the end of the current year," Gahramanov said.