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

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