Central Bank to finance SOCAR’s strategic project

By: Gulgiz Dadashova

Azerbaijan’s state energy company SOCAR seeks to attract a loan from the Central Bank of Azerbaijan to finance construction of a new Oil and Gas Processing and Petrochemical Complex (OGPC).

The company seeks to attract a loan in the amount of 1 billion manats ($953,675 million), SOCAR President Rovnag Abdullayev made the remark during the opening ceremony of a new office building of “Neftgaztikinti” trust on March 19.

The cost of the project amounts to $17.1 billion, including the interest rates of the loans to be received during the construction works.

“The loan will be attracted for implementation of the first phase of the OGPC project,” Abdullayev said. “We intend to attract about 1 billion manat for 10 years with an option to extend the loan repayment period for five years.”

The total cost of the first phase of the project is estimated at $7 billion (given a loan interest – $8.45 billion). The payback period will be 4-5 years. Around 30 percent of the project will be financed by the state funds (the amount will be partially allocated in five years), while the rest 70 percent would be financed by borrowed funds.

The OGPC will be established at a place 60 kilometers from Baku. It will consist of three processing enterprises and a thermal power plant (TPP). The project will be completed in late 2022 – early 2023.

The OGPC construction project implementation will improve the product quality, enhance the export potential of the country and help protect the environment of the capital.

The annual capacity of the refinery as part of OGPC will be 8.5-9 million metric tons; the gas processing plant will be 12 billion cubic meters, petrochemical production will exceed 1 million metric tons (the power of the plant for the production of polyethylene will be 800,000 metric tons, rigs for polypropylene production – 300,000 metric tons).

SOCAR is involved in exploring oil and gas fields, producing, processing, and transporting oil, gas, and gas condensate, marketing petroleum and petrochemical products in the domestic and international markets, and supplying natural gas to industry and the public in Azerbaijan.