SOCAR Turkey, an affiliate of Azerbaijan's state oil company SOCAR, will launch the STAR refinery with a $6.3 billion investment in Izmir in October, the general manager of the refinery said Monday.
The refinery is expected to narrow Turkey's current account deficit by $1.5 billion by alleviating raw material imports including diesel.
The facility is currently under construction on a 2,400-hectare site on the Aliaga Peninsula in Izmir, the Aegean city of Turkey.
Mesut Ilter, STAR Refinery's general manager, in an exclusive interview with Anadolu Agency, said that 99.1 percent of the refinery has been completed.
The investment to date is $5.2 billion, but once the project is completed, the total investment volume is anticipated to reach $6.3 billion.
The company is constructing the project with $3.3 billion in project financing from exim banks in countries including; Spain, Japan, Italy, the U.S. using $3 billion in equity.
Ilter said subsystems have already started operations at the refinery, which will have crude oil processing capacity of 10 million tons per year.
It will also input 5 million tons of diesel per year – an amount that would decrease Turkey's diesel imports from 55 percent to 40 percent, Ilter said.
Turkey's current diesel consumption is 24 million tons per year out of which 10 million tons are produced in Turkey.
The refinery is also expected to halt jet fuel imports while decreasing LPG imports from 79 percent to 70 percent after the plant becomes fully operational.
Ilter outlined the timeframe for the refinery and said, "We will receive first crude oil shipment by the end of June and it will come from Azerbaijan. This will also have a symbolic meaning for us.
"Then, we will take the first crude oil processing unit into operation in the third week of July. We will receive three or four more cargoes mostly from the Middle East and Russia. After these, we will have around a one-month gap during which all other systems will become operational. So the refinery will be ready to process first product at the beginning of October."
However, the refinery may not work at 100 percent capacity at the very beginning but by 2019 will be operating at full capacity, he added.
Ilter highlighted the growth in Turkey's demand for fuel products as an important reason for the facility.
He said Turkey's fuel consumption increased 4 percent in the last 10 years and is expected to grow by 2-3 percent in the coming 10 years.
With such growth in Turkey's economy, Ilter said that it has also been reflected in greater fuel consumption.
"This shows us that the investment in the STAR refinery is the right decision," he said.
He also argued that the country still needs further refinery investments to combat imports and advised that these investments be integrated with a petrochemical facility for project feasibility.
The STAR refinery will also meet the raw material needs of Petkim, SOCAR Turkey's petrochemical facility located on the same peninsula as the refinery.