WOOD Flash – Tupras: Energy Transition Strategy
Tupras announced its updated strategy yesterday (24 November), which focused on the energy transition and its pathway to net zero. Most of the peer group has such strategies in place. Tupras is focusing its investments in four main areas: sustainable refining, biofuels, carbon-free power generation, and green hydrogen. The refining investments should increase efficiency and reliability, and shift some of the production to petrochemicals feedstocks. A biofuel plant is to be constructed in Izmir, to produce 400,000tpa by 2026E, 75% of which will be sustainable jet fuel. Solar and wind power is another area of investment, with 1GW by 2030E. The initial investments will be made on Tupras’ existing sites. The purpose of the power generation investments is to provide clean power for green hydrogen. Tupras plans to have 400MW of electrolysers in operation by 2030E. By 2040E, all hydrogen production will be green, which will reduce CO2 emissions at the refineries by 25%. Based on the assumptions used, management expects the EBITDA to rise to USD 1.3bn per annum by 2030E, compared to USD 1.0bn per annum on average in recent years. A budget of USD 50m has been put aside to invest in energy start-ups, which may develop useful technologies related to the energy transition. Tupras plans an 80% dividend payout, and expects to pay out a cumulative USD 7.0bn of cash by 2035E.Turkiye Petrol Rafinerileri is an energy and refining company based in Turkey. Co. is engaged in providing and refining crude oil, the importing and exporting of oil products, and establishing and operating refineries in Turkey and foreign countries. Also, Co. is establishing and operating factories and facilities in the petrochemical industry. Co. is engaged in purchasing, selling, importing, exporting, storing, marketing and distributing (wholesale, retail, foreign and domestic) all kinds of petroleum products, LPG and natural gas. Co. runs its business through the refineries in Izmit, Izmir, Kirikkale and Batman.
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