Azeri SOCAR to supply its new Turkish refinery with third-party oil

Petkim Petrokimya Holding

09/11/2018 09:54

By Nailia Bagirova
    BAKU, Nov 9 (Reuters) - Azeri state energy company SOCAR
plans to supply its new refinery in Turkey with oil from
different producers in Europe, the Black Sea region and the
Gulf, the head of SOCAR's trading arm said in an interview.
    SOCAR last month launched the $6.3 billion SOCAR Turkey
Aegean Refinery (STAR), the first to be built in Turkey for the
past 30 years. 
    The facility on Turkey's Aegean coast will supply feedstock
to Turkish petrochemicals firm Petkim  PETKM.IS  to help cut
Turkey's dependence on imports of refined oil products. It will
boost the country's refining capacity by 25-30 percent.
    "Initial consumption (of oil) will be 100,000 barrels per
day with a further increase to 215,000 bpd," Adnan Ahmadzadeh,
SOCAR Trading executive chairman, said in answers to Reuters
questions sent by email.
    "SOCAR Trading will supply oil (to STAR) from different
producers at ports in the Mediterranean, Black Sea and Persian
Gulf, as well as from Russian company Rosneft  ROSN.MM ."
    He said the company had secured contracts to buy А-92 grade
gasoline from producers in Russia, Switzerland and Turkmenistan
due to planned maintenance at the Azeri Heydar Aliyev refinery
in the capital Baku.
    Russia and Swiss company Vitol have provided around 30,000
tonnes of gasoline each, while around 5,000-10,000 tonnes will
be shipped from Turkmenistan.
    
    GLOBAL PLAYER
    Geneva-based SOCAR Trading was set up in 2007 and has become
a global player in the last few years, having previously been
only a marketer of its country's crude, Azeri Light. Poaching
top traders from established rivals, it moved into paper trading
and third-party oil.
    Ahmadzadeh said oil was still "playing a central role" in
the firm's trading strategy, having a 50 percent share in its
portfolio.
    The firm last year traded 1.54 million bpd of crude oil, of
which about 1.06 million bpd was from third parties, it said in
July. Combining crude and oil products, it traded 104 million
tonnes. The firm also started trading liquefied natural gas in
2017.
    Ahmadzadeh said the company had decided to reduce the share
of fuel oil - recently at 30 percent - in its trading portfolio.
    "The strategic decision has been made, but it will start to
reflect on figures in 2019," he said.
    Ahmadzadeh said SOCAR Trading was open to discussions on
obtaining crude from Russia's Filanovsky and Rakushechnoye
oilfields in the Caspian Sea operated by Russian company Lukoil
 LKOH.MM , with shipment via the Baku-Tbilisi-Ceyhan pipeline.
    "We are ready for dialogue on these oilfields and don't see
any problems from a technical viewpoint on getting these oil
flows," he said.
    Ahmadzadeh said the company would soon start selling
polypropylene and low-pressure polyethylene from SOCAR's polymer
plant, which started operating in August.
    The main export markets will be Turkey, Europe, China and
India.
    As for the fertiliser carbamide (urea), which is expected to
be produced at a plant in the city of Sumgait in 2019, exports
will focus on Turkey, Romania, Ukraine, Bulgaria, Greece, Israel
and Italy. Annual production is estimated at 600,000 tonnes.

 (Writing by Margarita Antidze; editing by Vladimir Soldatkin
and Dale Hudson)
 ((margarita.antidze@thomsonreuters.com; +995322999370; Reuters
Messaging: margarita.antidze.thomsonreuters.com@reuters.net))