Implementation of the first stage of construction of the oil and gas refining and petrochemical complex (OGPC) in Baku’s Garadag region will demand the investments worth $8.45 billion, said SOCAR’s Vice President for Strategic Development Tofig Gakhramanov at the SOCAR’s II Forum on OGPC in Baku on November 5-6.
“The first stage of the project includes construction of the gas refining plant with the capacity of 12 billion cub.m. a year, petrochemical plant for construction of basic polymers with the capacity of 860,000 tons a year (high and low density polyethylene and polypropylene) and the autonomous power bloc. The two objects are planned to be put into operation in 2020,” Gakhramanov said.
He said cost of the first stage of the project is estimated at $7 billion, of which 30% will be invested by the state and 70% will be loan. Total cost of the first stage with credit interest rates will be $8.45 billion.
Profitability of the first stage of the project will be above 20% and the term of investments’ recoupment is 4-5 years.
Gakhramanov added that according to estimates of the PWC audit company, during the period of construction the economic effect from the OGPC project implementation will total $2 billion and during the period of operation – $225 billion.
Vice President added that SOCAR has conducted additional studies, which have allowed optimizing and reducing the project cost. “The changes were applied to launching of a new oil refinery, which is now scheduled for 2030. For this reason the Baku oil refinery is being upgraded now. At the expense of construction of 7-8 new installations on the Baku oil refinery, the term of the plant operation could be expanded by 15 more years,” he added.
He added that SOCAR plans to refuse of using naphtha as a raw material for the petrochemical plant and instead use gas factions C2+, which will be produced at the gas refining plant.
Gakhramanov added that SOCAR has been negotiating with French Total company to refine gas, which will be extracted on the Asheron field, on OGPC. “The technical and commercial details of this issue are currently under discussion,” he added.
