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Overview

CDB pledges loan for the SOCAR Gas Processing and Polyethylene Petrochemical Complex Project (GPC)

Commitment Year•2017Country of Activity•AzerbaijanDirect Recipient Country of Incorporation•AzerbaijanSector•Industry, Mining, ConstructionFlow Type•Loan

Status

Project lifecycle

Pipeline: Pledge

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Jan 1, 2017

Stakeholders

Organizations involved in projects and activities supported by financial and in-kind transfers from Chinese government and state-owned entities

Ultimate beneficial owners

At least 25% host country ownership

Funding agencies

State-owned Policy Banks

  • China Development Bank (CDB)

Receiving agencies

Joint Venture/Special Purpose Vehicles

  • SOCAR GPC LLC

Implementing agencies

State-owned companies

  • China National Petroleum Corporation (CNPC)
  • State Oil Company of the Azerbaijan Republic (SOCAR)

Loan desecription

CDB pledges loan for the SOCAR Gas Processing and Polyethylene Petrochemical Complex Project (GPC)

Interest type•Unknown

Narrative

Full Description

Project narrative

On May 15, 2017, CDB signed a Memorandum of Understanding with the State Oil Company of Azerbaijan (SOCAR) as well China Petroleum Corporation for the Gas Processing and Polyethylene Petrochemical Complex Project (GPC). This project, which is located in Garadagh district, involves the development, engineering, financing, construction, and operation of a gas processing plant project with a capacity of approximately 10BCM of natural gas per annum and a steam cracker with a capacity of approximately 570,000 tonnes per annum of ethylene and 120,000 tonnes per annum of propylene; and a swing LLDPE/HDPE polymerization unit with a capacity of approximately 570,000 tonnes per annum and related infrastructure. SOCAR GPC, a special purpose vehicle and a wholly-owned subsidiary of Azerbaijan's state‐owned oil company (SOCAR), has been established to carry out the development, engineering, financing, construction, and operation of the project. The total estimated cost of the project is $4.2 billion and it will reportedly be funded with equity, direct funding, export credit agency (ECA) covered debt, and commercial bank debt, primarily from Asian and European companies and institutions. Dutch ING Bank, the China Development Bank (CDB), and the Russian Gazprombank are acting as financial advisors and CDB is expected to be the main creditor of the project. Vinson & Elkins is acting as the international legal adviser to SOCAR GPC, with PSG Law Firm as Azerbaijani legal adviser.