SOCAR demands ‘strategic enterprise zone’ in İzmir’s Aliağa

BAKÜ

Azerbaijan’s state-run energy company SOCAR, which makes 80 percent of its foreign investments in Turkey, is on the eve of founding a new petrochemical facility in Turkey as big as the petrochemical company PETKİM, in which it is the majority stakeholder.

SOCAR Turkey chair Vagif Aliyev has requested that the area where this huge investment of more than $3 billion is planned to take place, the Aliağa Peninsula in Turkey’s Aegean province of İzmir, should be declared as a “strategic enterprise zone” by the Turkish government.

Such a step to declare the peninsula as a “strategic enterprise zone” would smooth the way for the final decision of investment due in 2019, Aliyev said.

“Feasibility studies are ongoing. We have presented our demand for the ‘strategic enterprise zone’ to the Turkish government with regard to the investment, which is named ‘the new PETKİM.’ We consider ourselves a strategic investor in Turkey and so does the Turkish government. Giving the ‘strategic enterprise zone’ status to the Aliağa region would ease our efforts to make the investment. It would cut the red tape and enable us to centralize the process of the investment instead of applying to the ministries one by one,” he added, pointing to a similar zone granted in Singapore.

Total investment in Turkey rises to $20 billion

Hosting Turkish journalists in the Azerbaijani capital Baku, Aliyev said licensing agreements for manufacturing at the site have started and agreements with BP and Axens have already concluded.

“We have made investments worth $12.6 billion in total in Turkey so far. When the new ones are concluded they will reach to $19.5 billion. For instance, we have been making an investment of $100 million every year since we bought PETKİM when it was privatized [in 2008],” Aliyev said.

Referring to upcoming elections in Turkey, he added that “political parties have never affected our investments in Turkey.”

“Investments from Azerbaijan have always been supported. We have never faced any problems. In accordance with [the late president of Azerbaijan] Heydar Aliyev’s strategy to connect Azerbaijan to Turkey, many significant investments have been made in Turkey,” he added.

Opening moved to an earlier date

However, SOCAR has been affected by the decision to hold snap presidential and parliamentary polls in Turkey on June 24, pointing to the rescheduling of the Trans Anatolian Natural Gas Pipeline’s (TANAP) opening.

“We had planned to hold a ceremony to start delivering gas to Turkey in the first week of July [2018]. Azerbaijani President Ilham Aliyev paid his first visit after being reelected to Turkey. After his meeting with Turkish President Recep Tayyip Erdoğan it was announced that the gas flow to Turkey will start on June 19, so the ceremony has been rescheduled to June 19,” he said.

According to Aliyev’s statements, the initial capacity of TANAP is expected to be 16 billion bcm of gas per year, of which 6 billion bcm will be delivered to Turkey and the rest of the 10 billion bcm will be delivered to Europe. However, with the help of the stations the capacity will be increased to 31 billion bcm, of which 12 billion bcm will be delivered to Turkey.

“The price of our natural gas will be cheaper than the Russian gas,” he added.