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SOCAR to Ask Central Bank for $952m for Petrochemical Plant

Source: Reuters 3/19/2015, Location: Asia

Azeri state energy company SOCAR will ask the central bank for a 1 billion manats ($952 million) loan to kick start building its $16.5 billion oil, gas and petrochemicals processing plant, SOCAR President Rovnag Abdullayev said.

SOCAR said last year it had delayed the completion of the complex, outside the capital Baku, by four years until 2030 due to a lack of funds.

"We intend to get 1 billion manat worth of credit for 10 years under our credit line in the central bank," Abdullayev told reporters on Thursday.

He said the money was needed for the first stage of the project at an estimated cost of $2.1 billion. Building is expected to begin at the end of 2015 and be completed by 2020.

The new complex will replace SOCAR's two ageing downstream refineries - the Baku and Azerneftyag oil refineries - as well as the Garadagh gas processing plant and the facilities of chemicals firm Azerikimya.

It will be built at Sangachal, 60 kilometres (37 miles) south of Baku, where Azerbaijan's main oil and gas pipelines reach the Caspian Sea.

Within the complex, the construction of a gas processing plant and a petrochemicals plant is due to be completed by 2020 instead of 2017, and an oil refinery by 2030 instead of 2026.

Industry sources say the new petrochemical complex will allow the country to profit from processing oil rather than exporting it.

SOCAR plans to attract 70 percent of the funds for the project from investment firms and private companies, and the rest will be financed by Azerbaijan's $37 billion state oil fund and SOCAR.

Once completed, annual oil refinery capacity will rise to 8 million tonnes of crude from 6 million tonnes.

The annual capacity of the gas processing plant is expected to be 12 billion cubic metres (bcm), while the petrochemical plant will produce about 800,000 tonnes of polyethylene and 300,000 tonnes of polypropylene. For more information about related Opportunities and Key Players visit Caspian Region Projects

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