By ERCAN ERSOY
Azerbaijans state-owned oil company, commonly known as
Socar, is in the final stages of negotiations for a $3.9
billion loan package to help build a refinery in Turkey,
according to two people familiar with the talks.
State Oil Company of Azerbaijan expects to sign the agreement
by early June, according to the people, who asked not to be
identified because the talks are confidential.
Socar is building the $5.5 billion Star refinery on the
Aegean coast as it seeks to expand its naphtha output. The refinery
, Turkeys fifth,
will process 10 million tpy of crude from 2017, producing 1.3
million tons of naphtha, as well as diesel and jet fuel.
About 95% of the borrowing will come from international
lenders arranged by the Turkish unit of Unicredit SpA,
Italys biggest lender, and will have a maturity of 18
years, the people said. The funds will be come with
guaranteed coverage from eight export-credit agencies,
including the US Ex-Im Bank and the Japan Bank for
International Cooperation. The remainder may come from
commercial loans, the people said.
Kenan Yavuz, chief executive of Socars Turkish unit, is
in London today to discuss the loan package with creditors,
one of the people said.
The Azeri oil producer and processor, which pledged $17
billion for project
s in Turkey by 2018,
including a pipeline to carry gas to Europe
via Turkish soil, is
increasing spending amid rising demand for fuel and
Petkim will take 2 million tpy of fuel from the plant, to be
built by Tecnicas Reunidas, Itochu, Saipem and GS Engineering
Kenan Yavuz, chief executive of Socars Turkey unit,
didnt reply to phone calls seeking comment. Silvia
Lamberti, a Vienna- based spokeswoman for Unicredit, declined
The US Ex-Im Bank approved a $641 million loan to finance the
export of equipment to Turkey for the project
, its chairman Fred
Hochberg said in December. The move will support exports of
cutting-edge American equipment and support 3,000
jobs in the US, he said.
As well as naphtha, the refinery
will produce 4.9 million
tpy of diesel and 1.63 million tons of jet fuel, Yavuz said.
It will also make liquefied petroleum gas and petro-coke.
will take less than
five years, Yavuz said in May 2013.