The STAR refinery belonging to SOCAR Turkey, and located in the Izmir region of Turkey will save $2.5 billion per year for the economy, SOCAR Turkey's CEO Kenan Yavuz told Anadolu Agency Thursday.
Yavuz said the refinery will begin operating in 2018 and given the current oil prices, will save Turkey's economy around $2 to $2.5 billion every year.
'The facility will have an annual capacity to refine 10 million tonnes of crude oil. All of this amount is currently imported. Turkey's diesel imports are way above its domestic production. We will produce all the jet fuel and liquefied petroleum gas in this refinery to substitute those imports,' Yavuz explained.
'Our refinery project also aims to produce all the imported equipment in Izmir. This will not only support the petrochemical firm Petkim's competitiveness, but also help Turkey to lower its current account deficit,' he added.
Petkim was founded in 1965 as the first petrochemical plant in Turkey, and was sold to SOCAR Turkey during a privatization tender in 2008.
'The refinery investment will completely remove Petkim's import dependency. The company has a target of saving $100 million annually. This will increase the competitiveness of the company and its transition to produce value-added products,' Yavuz said.
He highlighted that Turkey's current account deficit is falling lately with government measures.
'With such projects aimed at production, the problem [of high deficit] can be solved easily,' he said.
- Turkey needs petrochemical plants more than refineries
'After our refinery is completed, Turkey's refinery needs may emerge after the 2020s. Instead, Turkey needs investment in the petrochemical sector urgently,' Yavuz explained.
He said that today Petkim can meet only 20 percent of domestic needs as the market is increasing rapidly. He advised that Turkey needs at least five more petrochemical facilities.
'After completing our refinery investment and ridding imports of raw materials, we can think new investments in petrochemical sector,' he added.
Yavuz emphasized that Turkey needs petrochemical investments in other regions of the country as well, and said 'It is not an advantage to be the sole producer in an open market. All your competitors are importers. We wish to have new investors in the petrochemical sector.'
He also noted that international investment bank Goldman Sachs' purchase of a 13 percent share in SOCAR Turkey has provided great advantages for stabilizing fluctuations in the U.S. dollar against the Turkish lira.
Goldman Sachs paid $1.3 billion for SOCAR Turkey's 13 percent share on Aug. 14.
- STAR refinery
'So far, we have spent $2 billion. 95 percent of the infrastructure and 33 percent of the total project is complete. The necessary equipment and machinery will begin arriving at the end of this month. In 2016 and 2017, we will assemble those and build the storage tanks,' Yavuz said.
He stated that there are currently 4,000 workers employed at the construction of the project, and this number will reach 10,000 next year.
'Ninety eight percent of employees comprise Turkish engineers and workers. This is important for us to gain knowledge of refinery building technologies,' he said.
Stressing that the consumption rate of refined and petrochemical products is twice the growth rate of the economy in Turkey, Yavuz pointed out that even the rapid growth rate of the number of motor vehicles in Turkey shows the importance of refinery investment.
'We have to support Turkey's increasing welfare with our production power,' Yavuz said.
Reporting by Tolga Albay
Writing by Ovunc Kutlu
Anadolu Agency
ovunc.kutlu@aa.com.tr