Rosneft, Russia's largest oil producer, will supply oil to the State Oil Company of Azerbaijan Republic's (SOCAR) Turkey Aegean Refinery (STAR) established in İzmir's Aliağa district.
The agreement, which stipulates Rosneft's provision of 1 million tons of oil to Star refinery per year, was signed during a meeting between Azerbaijan's President Ilham Aliyev and Russian President Vladimir Putin and Rosneft CEO Igor Sechin in Sochi on Saturday.
SOCAR's President Rovnag Abdullayev and Rosneft's Sechin signed the agreement that will bring Russian oil to the SOCAR's refinery, which is expected to become operational in the coming months.
With this contract, 1 million tons of Russian oil per year will be supplied to Turkey's largest foreign investor SOCAR's Star Refinery as of December this year.
Meanwhile, STAR started operations at its first facility in early August. The first crude oil cargo ship, Absheron, carrying 80,000 tons of feedstock from Azerbaijan, arrived at the 2,400-hectare facility on the Aliağa Peninsula.
Turkey CEO of SOCAR Zaur Gahramanov had confirmed the arrival of the first shipment and said production would start at the end of October. He also announced that a launching ceremony for the refinery would be held with the attendance of President Recep Tayyip Erdoğan and Azerbaijan's President İlham Aliyev.
The $6.3 billion refinery is the largest single-location real sector investment in Turkey's history and will be one of the biggest petroleum and gas operations in Europe, Middle East and Africa.
The refinery is being built by SOCAR, which began investing in Turkey after it acquired the country's leading petrochemical company Petkim in 2008 for $2 billion. Construction at the refinery began in 2011.
The refinery is expected to cut Turkey's current account deficit by $1.5 billion. It also looks to fully eliminate the need to import jet fuel, which will correspond to 7-8 percent of its total production. The refinery is also expected to reduce LPG imports to 70 percent from 79 percent.
With an annual production capacity of 10 million tons of crude oil, the refinery will also produce 1.6 million tons of naphtha, 1.6 million tons of jet fuel, and 4.5 million tons of low-sulfur diesel that the Petkim refinery needs will be produced at STAR.