Azeri Energy Company to Borrow €15 Billion

Azerbaijan's official energy company SOCAR intends to borrow more than $20 billion (€15.5bn) over a five-year period to finance energy projects, the country's vice-president has said.

The all-out effort aims to increase gas exports to Europe over seen by SOCAR (State Oil Company of Azerbaijan), which overseas the hydrocarbon economy, on which the Black sea country bases its wealth.

Reuters says the campaign also represents a challenge to Russia, Azerbaijan's northern neighbour and the world's biggest source of gas.

Baku's plan to tap its Shah Deniz II field for an expected 16 billion cubic meters (bcm) per year of gas to Europe is in direct competition with the South Stream pipeline project, led by Russia.

Vice President Suleiman Gasymov said he would approach foreign banks, as well as turning to the state oil fund to pay for a $5 billion refinery in Turkey, a $17 billion oil and gas processing and petrochemical complex, the $8 billion Trans-Anatolian natural gas pipeline project (TANAP) and new drilling rigs on the Caspian Sea worth $4 billion.

"SOCAR starts implementation of four projects with a total estimated cost of $33 billion-$35 billion from 2013," he said in an interview.

"Sixty-five percent of the cost will be provided by bank credits, while the remaining 35% from Azerbaijan's own resources, mainly the state oil fund."

SOCAR is a sole shareholder in three projects and controls TANAP. A decision by the Shah Deniz consortium on whether EU-backed Nabucco West, or Trans-Adriatic Pipeline, will be appointed as its next stage conduit is expected in a month.

See also: Route of Azerbaijani gas supplies to Europe to be determined by late June