SOCAR seeks CBA loan for constructing new OGPC

By: Gulgiz Dadashova

Azerbaijan’s state energy company SOCAR has appealed to the Central Bank of Azerbaijan for a major loan to finance construction of a new Oil and Gas Processing and Petrochemical Complex (OGPC), said Suleyman Gasimov, SOCAR Vice President.

The OGPU project envisages construction of a petrochemical enterprise with a capacity of 1.7 million tons of finished products, an oil refinery with a capacity of 10 million tons per year as well as a gas processing plant with a capacity of 10 billion cubic meters per year.

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 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 implemented through the state funds (the amount will be partially allocated during five years), while 70 percent – through the borrowed funds.

He further said about 30 percent of the project –about $2.1billion should be funded through SOCAR.”The company intends to attract required funding for these two enterprises gradually. Parts of the funding maybe ensured through a loan from the Central Bank,” he said, without disclosing the exact amount of the loan.

Azerbaijan will commission two new gas processing and petrochemical plants, being built under the OGPC, in early and late 2020, respectively. The OGPC construction project will improve the product quality, enhance the export potential of the country and help protect the environment of the capital.

Speaking about the liquidation of the refinery Azneftyag and its bonding to the Baku Oil Refinery named after Heydar Aliyev, David Mammadov, SOCAR Vice-President on processing, said that it will not affect the quality and quantity of petroleum products at the refinery.

Azneftyag may stop its activity in 2018-2019, after necessary production are established at the Heydar Aliyev refinery, he said.

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.