STAR Refinery to process 8 mln tons of oil

STAR Refinery to process 8 mln tons of oil

STAR Refinery to process 8 mln tons of oil

STAR Refinery has processed 1.5 million tons of crude oil to date and total production will reach 8 million tons by the end of this year, Zaur Gahramanov, head of Socar Türkiye, has said.

Gahramanov added that the refinery will start importing oil from Iraq from next month.

“Iraqi oil will be delivered from Basra,” he said without providing other details.

The refinery is working at full capacity and Start Refinery has started selling diesel and jet fuel in the Turkish market, according to Gahramanov, who noted that they will begin to sell petroleum coke next month.

He added that Socar will provide 700,000 tons of jet fuel to the mega Istanbul Airport.

The opening ceremony for the $6.3 billion STAR facility, located in the Aliağa peninsula in the Aegean province of İzmir, was launched on Oct. 19, 2018 which Turkey’s President Recep Tayyip Erdoğan and Azerbaijan’s President Ilham Aliyev attended.

The refinery has the capacity to produce around 5 million tons of diesel, 1.6 million tons of jet fuel, 1.5 million tons of naphtha, 1 million tons of reformate, 700,000 tons of petroleum coke, 300,000 tons of LPG and 200,000 tons of sulfur.

The total output of STAR is expected to decrease Turkey’s current account deficit by $1.5 billion per year, by substituting refinery imports with domestic production.

Gahramanov also said that they have a joint petrochemicals investment project with BP. “We are working on it,” he said.

“This would be around a $2 billion worth of investment and will help Turkey reduce its current account deficit. We will apply for an investment incentive after the project is finalized.

Currently, the local petrochemicals firm Petkim consumes 250,000 tons of petrochemicals products of STAR Refinery, according to Gahramanov.

“STAR can boost petrochemicals production up to 750,000-790,000 tons, and of which 500,000 tons could be exported,” he said.

IPO plans

On a related note, Azerbaijan’s state energy company SOCAR plans to list its Turkish subsidiary on the London, Hong Kong and Istanbul stock exchanges in 2021, Gakhramanov told Reuters on May 31 at the annual Caspian Oil and Gas conference in Baku.

“We believe that we have a good asset that we can monetize and the initial public offering [IPO] is a profit for shareholders,” he said, without specifying the volume of shares in SOCAR Türkiye Enerji that SOCAR planned to offer to investors.

But he said that shareholders and SOCAR’s management would decide how to use proceeds from the IPO.

Citigroup and JP Morgan will be listing consultants, while McKinsey will help with “technical and financial optimization.”

Gakhramanov said that SOCAR had been given final permissions for the acquisition of natural gas distributing networks in the Turkish industrial cities of Kayseri and Bursa from Germany’s EWE Turkey Holding on May 27 and would finalize the deal by mid-June.

The company expects to be distributing 4 billion cubic meters (bcm) of gas to consumers in Turkey from 2020.

Gakhramanov also said that gas supplies from Azerbaijan’s giant Shah Deniz field to Turkey through the Trans-Anatolian Pipeline (TANAP) would reach 3 bcm in 2019 and would double from 2020.