U.S. Ex-Im Bank Approves $640.7 Million Credit to Finance Turkish Refinery Project

---

Researched by Industrial Info Resources (Sugar Land, Texas)--The U.S. Export-Import Bank has approved $640.7 million in direct loans to Star Rafineri A.S., pertaining to refinery components produced in the U.S. and to be used in the investment.

Star Rafineri, a 10 million-tonne crude oil processing refinery, is owned by STYAS, which holds a 41.5% stake in STYAS and is controlled by Refinery Holding A.S., which itself is fully owned by State Oil Company of Azerbaijan Republic (Socar); MED-Azerbaijan State, which holds a 40% stake; and Turcas Petrol, which holds an 18.5% stake.

The cumulative capital expenditures of Star Rafineri, including financing, are expected to reach $5.5 billion, of which $1.9 billion will be financed with equity. Negotiations regarding the debt portion (to be financed through project financing) of the investment have been continuing for a number of years.

"We expect these negotiations to be completed within the next six months," said Kazim Andac, an analyst at Deutsche Bank in Istanbul. "Also, we expect the refinery to be operational in the first half of 2018."

Naphtha from the proposed Star Rafineri will be used to make petrochemicals at Socar's Turkish Petkim Petrokimya Holding (BIST:PETKM) (Izmir, Turkey) division. The refinery will process 10 million metric tons of crude a year, producing 1.3 million tons of naphtha, as well as diesel and jet fuel. Petkim will take 2 million tons of fuel per year from the plant. The refinery will produce 4.9 million tons of diesel per year and 1.63 million tons of jet fuel.

"The refinery may help to reduce Turkey's current account deficit, which was the world's third largest in 2012, by $2.5 billion a year," said Kenan Yavuz, CEO of Socar Turkey, in a press briefing on Thursday. "The construction of refinery will take less than 5 years."

Socar has an 81.5% stake in the project, while Turcas Petrol A.S. (BIST:TRCAS) (Istanbul, Turkey) holds the rest.

"Our investment in Turkey will sum up to $17 billion to $20 billion in the 2008-2018 period. Also, we recently revised up our cost projections for the Trans Anatolian Pipeline (TANAP) project to $8 billion to $10 billion, from $7 billion to $8 billion," Yavuz said.

The TANAP project, which is set to ship Azeri gas to Turkey, will operate with a 16 billion-cubic-meter capacity by 2018.

For additional information, see November 20, 2013, article - TANAP to Begin Construction in Early 2014, Turkish Premier Says.

View Project Report - 82600154

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and nine international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities