Azer­bai­jan’s new OGPC to be paid off in 7-8 years

Azer News - - FRONT PAGE - By Gulgiz Dadashova

The in­ter­nal stan­dard of prof­itabil­ity of the pro­ject on con­struc­tion of a new oil and gas pro­cess­ing and petro­chem­i­cal com­plex (OGPC) will amount to 13 per­cent, and the com­mis­sion­ing of the fa­cil­ity is planned for 2021, Pres­i­dent of Azer­bai­jan's state en­ergy com­pany SO­CAR Su­ley­man Gasi­mov said, SO­CAR Plus mag­a­zine re­ported.

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

Gasi­mov said the pay­back pe­riod of the com­plex will be 7- 8 years. Th­ese fig­ures cor­re­spond to those on sim­i­lar projects im­ple- mented in the whole world.

The cost of the pro­ject, de­ter­mined based on a fea­si­bil­ity study, amounts to $17.1 bil­lion, in­clud­ing ac­crued in­ter­est on loans which were at­tracted dur­ing the con­struc­tion work.

Ac­cord­ing to Gasi­mov, the fi­nanc­ing of about 30 per­cent of the pro­ject cost is to be car­ried out at the ex­pense of cap­i­tal stock ( about $ 5 bil­lion), and 70 per­cent -- at the ex­pense of loan cap­i­tal (nearly $12 bil­lion).

"Around 90 per­cent of the char­ter cap­i­tal falls to the state and will be fi­nanced by Azer­bai­jan's oil fund SOFAZ ( in the amount of nearly $ 4.6 bil­lion), and the re­main­ing 10 per­cent (nearly $0.5 bil­lion) -- by SO­CAR. It is ex­pected that the loan cap­i­tal will be fi­nanced by for­eign banks and -- if nec­es­sary -- by SOFAZ," Gasi­mov said.

It is planned to pro­duce around 3 mil­lion tons of petrol and nearly 3.6 mil­lion tons of diesel fuel per year at the OGPU. The prod­ucts will meet the Euro-5 stan­dard. In ad­di­tion, it is planned to pro­duce A1 jet engine fuel (about 1.7 mil­lion tons) which com­plies with the ad­vanced Western stan­dards, and other oil prod­ucts. More­over, in or­der to cre­ate ad­di­tional value, it is en­vis­aged to pro­duce nearly 1.7 mil­lion tons of ex­port-ori­ented petro­chem­i­cal prod­ucts.

"It is planned that around 8590 per­cent of the to­tal vol­ume of poly­eth­yl­ene (about 880,000 tons per year), polypropy­lene (around 780,000 tons per year) and bu­ta­di­ene (about 80,000 tons per year), which are pro­duced in the petro- chem­i­cal plant, will be ex­ported to the Turk­ish, as well as to Euro­pean and Asian mar­kets," Gasi­mov said.

Azer­bai­jan sees growth in the con­sump­tion of pe­tro­leum prod­ucts year on year, but SO­CAR has as­sured that avail­able pro­cess­ing en­ter­prises will pro­vide the coun­try with the re­quired amount of oil prod­ucts un­til the new com­plex comes on stream.

Cur­rently, oil prod­ucts are pro­duced at two Baku re­finer­ies with to­tal ca­pac­ity of 20 mil­lion tons of oil a year. Both re­finer­ies are part of SO­CAR, which an­nu­ally pro­cesses about 6 mil­lion tons of oil from on­shore and off­shore fields on its own.

Around 4.8 mil­lion tons of pe­tro­leum prod­ucts were de­liv­ered to the Azer­bai­jani mar­ket in 2012, 8.8 per­cent more than in 2011.

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