Energy
SOCAR Moves Toward Year-End Decision on $7 Billion Petkim Expansion
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Azerbaijan's State Oil Company SOCAR is moving a multibillion-dollar petrochemical expansion at its Turkish subsidiary Petkim toward a final investment decision before the end of 2026, according to Fitch Ratings.
The project, estimated at between $5 billion and $7 billion, would be built at Petkim's complex in Aliağa, İzmir. Preliminary engineering was completed in July 2026, and the programme is now moving into the full front-end engineering design (FEED) phase. Technip, the engineering group, has signed a memorandum of understanding to carry out technical and economic studies.
What the expansion targets
The investment is designed to lift domestic polyolefin output and deepen integration between Petkim and the neighbouring STAR Refinery. SOCAR estimates it would cut Türkiye's import dependence by roughly $1.5 billion a year.
Petkim currently produces about 3.6 million tonnes annually across more than 60 petrochemical products and meets around 9% of Turkish petrochemical demand. STAR Refinery processes about 13 million tonnes of crude oil each year. SOCAR's cumulative investment in Türkiye had reached $19.5 billion as of June, according to the Fitch-sourced reporting.
Balance-sheet context
In a separate assessment dated September 15, Fitch said it expects SOCAR's capital expenditure to average around AZN 4 billion a year in 2026-2030. EBITDA net leverage is projected at about 1.0x in 2026, rising to roughly 2x by 2029. Fitch also pencils in dividends to the Azerbaijani government averaging AZN 1.8 billion annually over the period, and support for Petkim of about AZN 250 million a year through 2027.
SOCAR's 2025 EBITDA after dividends to non-controlling interests rose to AZN 9.3 billion from AZN 5 billion in 2024, reflecting a full year of consolidation of the Southern Gas Corridor and the STAR refinery. At end-2025 the company held AZN 14 billion in cash and equivalents against AZN 15.1 billion of short-term debt, and in 2026 it has repaid or refinanced AZN 14.2 billion using a mix of short- and long-term financing.
Why it matters
For investors, the Petkim project is the largest pending call on SOCAR's capital beyond its upstream commitments. Fitch expects production declines to stabilise only from 2028, which makes downstream value-add in Türkiye a central pillar of the company's earnings mix. The final decision, due by year-end, will show how SOCAR balances that growth push against its leverage target.
Source: Fitch Ratings, as reported by The Arabian Post and Trend.
