BAKU, Azerbaijan, January 24. The Russian corporation Lukoil will provide oil to the STAR refinery, which is operated by the State Oil Corporation of Azerbaijan Republic (SOCAR), at least until 2026, including the usage of Azerbaijani Aframax-type tankers Karabakh, Shusha, and Zangezur, a source in the government told Trend.
"Last year, we agreed to a $1.5 billion loan with Lukoil, which included a commitment to receive Lukoil's oil from various fields (Urals brand) at a discount, load it into tankers in Russian Baltic Sea ports, and transport it to the STAR refinery. This partnership scheme will run for several years, at least until 2026 inclusive," the source said.
To clarify, Lukoil's oil deliveries to the STAR refinery began in the fourth quarter of 2023. This refinery could receive up to 500,000 tons of oil per month from Lukoil.
The STAR refinery has an annual capacity of 12 million tons of oil, which may expand to 13 million tons this year. As a result, Lukoil's discounted (because of sanctions) oil can meet around half of the refinery's requirements.
Meanwhile, in 2022, the STAR refinery acquired approximately 400,000 tons of Russian oil per month; from the beginning of 2023, imports have decreased by half; from August to September 2023, no purchases were made; and since October 2023, a long-term deal between SOCAR and Lukoil has taken effect.
As previously explained in ASCO, the tankers Karabakh, Shusha, and Zangazur were transferred to a long-term lease (time charter) based on the decision of the government and SOCAR, the customer for oil transportation.
The tankers, capable of carrying 70,000 to 120,000 tons of oil, were bought by SA Maritime AFEZCO, a joint venture of Azerbaijani state companies ASCO and SOCAR, last year.
The new Aframax class tankers are insured by Azerbaijan's Pasha Insurance.
The price of Russia's Urals crude fell below $60 a barrel in November 2023 and has yet to breach that level amid the cheapening of the Brent benchmark.
The price STAR refinery takes Lukoil's oil at is not advertised, but it does not exceed the "ceiling" or "price cap" established in the world for Russian oil.
However, when the STAR refinery opened in 2018, the first oil for it was oil from Russia's Rosneft.
The Urals grade is suitable for this refinery in terms of quality and, most importantly, price.
Stay up to date with more news on Trend News Agency's WhatsApp channel
