SOCAR yet to decide on development, financial strategies on OGPC

/By AzerNews/

By Gulgiz Dadashova

Azerbaijan’s energy giant SOCAR will decide on a long-term development strategy for the Oil and Gas Processing and Petrochemical Complex (OGPC) in 2016.

Emil Alkhasli, the deputy director general for OGPC project made the remark during the 19th annual CIS Downstream Week on refining, petrochemicals, petrochemical refining and petrochemical industry in Baku on December 2.

The OGPC will be established at a place 60 kilometers from Baku. It will consist of three processing enterprises and a thermal power plant (TPP). The project will be completed in late 2022 - early 2023.

The project’s implementation will improve the product quality, enhance the export potential of the country and help protect the environment of the capital.

Work on the project continues, Alkhasli said, adding that currently, negotiations are underway with potential investors led by the Japanese Mitsui.

“We will also decide on the financial strategy of the complex and will complete the work on the long-term development strategy in 2016,” he added.

Marketing research has already been conducted, location plan of the gas processing plant and petrochemical complex is ready and their environmental impact assessment has been worked out, according to Alkhasli.

The cost of construction of the OGPC is $17.1 billion (including interest on loans received during the construction period). Some 30 percent of the project's cost is planned to be financed with the authorized capital (nearly $5 billion), while 70 percent of the projects – with the borrowed capital (about $12 billion).

The total cost of the first phase of the OGPC project is estimated at $7 billion (including interest on loans - $8.45 billion). The payback period of the project will last four to five years.

The OGPC construction project implementation will improve the product quality, enhance the export potential of the country and help protect the environment of the capital.

The annual capacity of the refinery as part of OGPC will be 8.5-9 million metric tons; the gas processing plant will be 12 billion cubic meters, petrochemical production will exceed 1 million metric tons (the power of the plant for the production of polyethylene will be 800,000 metric tons, rigs for polypropylene production – 300,000 metric tons).

Once commissioned, the OGPC will enable to significantly increase the revenues of Azerbaijan’s state budget, Gulmammad Javadov, first deputy energy minister of the country said.

Javadov, who addressed the same event, said Azerbaijan has great plans and tasks related to oil refining.