16 October 2013 13:20 [Source: ICIS news]
WARSAW (ICIS)--Turkey's planned Star Refinery, intended as the major feedstock supplier to Petkim's $10bn (€7bn) petrochemical "supersite", will be seen as something of a "silver bullet" by refining executives, delegates at a conference heard on Wednesday.
“We are one of the lucky bunch still courageous enough to make investments in a grass roots refinery,” Ziya Gurun, Star project director, said at the 16th Central and Eastern European Refining and Petrochemicals gathering in Warsaw, organised by the World Refining Association, noting how the refinery should have a profitable role supplying feedstock to the emerging 'Petkim Peninsula' complex.
Against a background of refinery closures in Europe in recent years, the Star Refinery would maximise the petrochemical factor and not concern itself with producing gasoline, thus avoiding the current challenging search for a gasoline market, he added.
“That is a big point for us,” said Gurun, outlining how Star had 20-year deals to supply reduced-sulphur naphtha, xylenes and liquefied petroleum gas (LPG) to its neighbour on the peninsula in Aliaga, near Izmir, on western Turkey’s Aegean coast.
Costing up to $5bn, Star would have a naphtha capacity of 1.3m tonnes/year along with production capacities of 400,000 tonnes/year of xylenes, 330,000 tonnes/year of LPG, 500,000 tonnes/year of jet fuel, 6m tonnes/year of diesel, 500,000 tonnes/year of reformate, 700,000 tonnes/year of petro coke and 170,000 tonnes/year of sulphur.
Like Petkim – the sole Turkish petrochemical producer, which has a strategy to greatly reduce Turkey's petrochemical trade deficit by rapidly building on its current domestic petrochemical market share of around 25% by more than tripling its output to 10m tonnes/year within a decade – Star is controlled by the State Oil Company of the Azerbaijan Republic (SOCAR).
Feedstock sold by Star to Petkim would nevertheless be in line with market prices, with an eye to conforming with price transfer laws, said Gurun.
“The advantage of Petkim in all of this is mostly in saving on transportation costs,” he added.
Although Star and Petkim would have some production facility interdependence, it was vital that they maintained independence where necessary, Gurun said, adding that too much integration between a refiner and a petrochemical producer could cause operational difficulties.
Star, for instance, would source high-pressure steam from Petkim but it would also have its two of its own steam production units that it could fall back on in case of a stoppage, he added.
[These units] were one of the major requirements of the lenders,” Gurun said.
The wastewater system to be used by Star would to a degree be an extension of Petkim's existing facility, but would not be reliant upon it, while Star would also purchase excess hydrogen from Petkim, he added.
Petkim, he added, was working on a project to producer power from wind turbines, and this could be a power supply option for Star in the future, the project director said.
($1 = €0.74)
|ICIS news FREE TRIAL|
|Get access to breaking chemical news as it happens.|
|ICIS Global Petrochemical Index (IPEX)|
|ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index|
Asian Chemical Connections