Baku, Azerbaijan, April 25
By Maxim Tsurkov - Trend:
In the framework of the project of construction of urea factory, the Azerbaijan state company SOCAR spent 320 million euros from 500 million euro loan allocated by foreign banks, said the Director of the factory Khayal Jafarov.
He made the remarks during III SOCAR International forum entitled as "Downstream of the Caspian Sea and Central Asia - trade, logistics, refining and petrochemicals" in Baku on April 25.
He said that the total cost of construction of the plant is estimated at 770-780 million euros.
"The payback period of the plant is estimated at seven to eight years at current prices for carbimide," said Jafarov.
At first, financing of construction work was carried out from the Azerbaijani state budget and about 210 million manats were allocated from there before the beginning of 2015, another 60-65 million euros were allocated to SOCAR.
But later it was decided to switch to project finance and negotiations with banks were started. As a result, the Export–Import Bank of South Korea (EximBank) opened a line of credit worth 500 million euros under Azerbaijan’s state guarantee to complete the construction of the plant. EximBank will directly provide 251 million euros, while 249 million euros will be allocated by three commercial banks (Italy’s UniCredit S.p.A., France’s Societe Generale S.A. and Germany’s Deutsche Bank AG) with the support of EximBank.
The plant will produce 1,200 tons of ammonia and, subsequently, 2,000 tons of urea per day. It is planned to supply a quarter of production, that is, 150,000 tons of urea (with a potential growth of up to 200,000 tons, or 30 percent of production) to the Azerbaijani domestic market. The remaining part will be exported to Turkey, Georgia and the markets of the Black Sea and the Mediterranean Sea countries.
South Korea’s Samsung Engineering won the tender for the construction of the urea plant. Samsung Engineering acts as a general contractor of the plant’s construction, but it has no license for production of urea and ammonia, which will be by-product in the urea production process. Therefore, the relevant licensing agreements were signed with Haldor Topsoe company (Denmark) for production of ammonia and Stamicarbon B.V. company (the Netherlands) for production of urea.
Production at the plant will be environmentally friendly, that is, no pollutant emissions into the atmosphere are expected. The plant will have an autonomous electricity system. The plant will consume 25-26 MW of electricity per hour.
Some 1.3 million cubic meters of gas per day will be required to operate the urea plant at full capacity.