AZERBAIJAN: Socar Polymer to sign EPC contract for HDPE plant by end of 2015

The State Oil Company of Azerbaijan Republic (Socar) is to sign an EPC (engineering, procurement & construction) contract with the "turnkey" guarantee on the project of the high density polyethylene plant in Sumgait.

Socar Polymer LLC managing director Farid Jafarov says that the construction of the plant will start in 2016, and start-up work is scheduled for late 2017 or early 2018. Full commissioning of the enterprise is expected at the end of the 2nd quarter of 2018. The plant will produce 120,000 tons of high density polyethylene a year.

"In January 2018 a polypropylene production plant (contract executor: Italy’s Maire Tecnimont) will be put into operation within the framework of the Socar Polymer project. Start-up work at this plant will begin in mid-2017. The plant will produce 180,000 tons of polypropylene a year," Jafarov emphasized.

Socar raised a USD489 million loan from Russia’s Gazprombank for financing the construction of the Socar Polymer plants for production of polypropylene and high density polyethylene. The money are given for 10 years and will cover 60% of the total project cost; the remaining 40% will be funded by the Socar Polymer shareholders.

"Gazprombank has already allocated USD60 million of the total loan amount in accordance with the project schedule," Jafarov noted.

The total cost of building the two Socar Polymer enterprises is USD700-750 million, given contingent expenditures and schemes of VAT refund.

Out of the plants’ total output, 30-40% will be directed for the domestic market (full coverage of needs) and the rest will be exported, in particular to Turkey.

Source: “Azerbaijan Business Center” (ABC), Baku; 2 Dec 2015
(Syed Rashid Ali, Karachi, Pakistan)