Azerbaijan's state energy firm SOCAR will spend up to $5 billion on its planned oil refinery in the west of Turkey and aims to begin production in mid-2017, the company's Turkey CEO Kenan Yavuz said on Monday, Reuters reports.
SOCAR, which owns Turkish petrochemical company Petkim , is building the Star refinery in partnership with Turcas Petrol to supply Petkim and reduce Turkey's dependence on imported refined products.
Turkey currently imports nearly all of its oil products. Its sole refiner Tupras has four plants with a combined capacity of 28 million tonnes.
SOCAR's Star plant in Aliaga on the Aegean coast is expected to have annual capacity of 10 million tonnes.
On Monday the Azeri company signed a $3.46 billion engineering procurement and construction contract with a consortium comprising Tecnicas Reunidas, Saipem , GS Engineering & Construction and Itochu Corp .
Yavuz said that SOCAR will borrow about $3 billion to finance the project, adding that a recent credit rating upgrade by Moody's would have a positive impact on borrowing costs.
Turkey received its second investment-grade credit rating from Moody's last week; a seal of approval from international markets that drove its sovereign bond yields to historic lows.
SOCAR owns 81.5 percent of the Aegean refinery project at Aliaga, with Turkey's Turcas Petrol owning the remaining 18.5 percent.
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