Turkey’s refinery to make $3 billion upgrade online by 2015

İZMİT - Reuters

DHA Photo

Turkish refiner Tüpraş aims for all units in the $3 billion upgrade project at its İzmit refinery to be online at the start of next year, its General Manager Yavuz Erkut said Dec. 1.

Tüpraş had said in its third-quarter results announcement in early November that the upgrade would be completed before the end of year.

Lacking any major hydrocarbons production, Turkey depends on imports for almost all of its energy needs. It has a surplus of gasoline but is heavily dependent on diesel imports.

The Residuum Upgrade Project (RUP), launched in 2011, will boost the conversion capacity of the 11 million tons per annum İzmit refinery and enable it to process heavier crude oils.

“We will hold an official opening on Dec. 15. At the start of January we aim for all units in the plant to be online,” Erkut told a meeting to announce the project.

The fuel oil conversion plant will be able to process annually around 4.2 million tons of low value fuel oil, for which demand in Turkey has been falling.

It will produce 2.9 million tons of diesel, 500-550,000 tons of petrol, 710,000 tons of petroleum coke, 70,000-80,000 tons of liquefied petroleum gas and some jet fuel.

Erkut said that despite the sharp fall in oil prices, the company maintained its target of the plant contributing an annual $500-550 million to EBITDA.

“In our feasibility (study) the fundamental reference is the difference between fuel oil and diesel prices. When you look at that we can see it has maintained the difference in our feasibility,” he said.  

He said the investment would reduce Turkey’s annual current account deficit by around $1 billion. The project was expected to reduce overall diesel imports by 10 percent.

Growing vehicle demand and gasoline substitution have been the main drivers of booming diesel consumption.

Tüpraş has a total refining capacity of 28.1 million tons in four refineries.