Azerbaijan’s state-owned oil company, commonly known as Socar, is in the final stages of negotiations for a $3.9 billion loan package to help build a refinery in Turkey, according to two people familiar with the talks.

State Oil Company of Azerbaijan expects to sign the agreement by early June, according to the people, who asked not to be identified because the talks are confidential.

Socar is building the $5.5 billion Star refinery on the Aegean coast as it seeks to expand its naphtha output. The refinery, Turkey’s fifth, will process 10 million tpy of crude from 2017, producing 1.3 million tons of naphtha, as well as diesel and jet fuel.

About 95% of the borrowing will come from international lenders arranged by the Turkish unit of Unicredit SpA, Italy’s biggest lender, and will have a maturity of 18 years, the people said. The funds will be come with guaranteed coverage from eight export-credit agencies, including the US Ex-Im Bank and the Japan Bank for International Cooperation. The remainder may come from commercial loans, the people said.

Kenan Yavuz, chief executive of Socar’s Turkish unit, is in London today to discuss the loan package with creditors, one of the people said.

The Azeri oil producer and processor, which pledged $17 billion for projects in Turkey by 2018, including a pipeline to carry gas to Europe via Turkish soil, is increasing spending amid rising demand for fuel and chemicals.

Naphtha from the Star refinery will be used to make petrochemicals at Socar’s Turkish Petkim Petrokimya Holding division, the biggest petrochemicals company in the country.

Petkim will take 2 million tpy of fuel from the plant, to be built by Tecnicas Reunidas, Itochu, Saipem and GS Engineering & Construction.

Kenan Yavuz, chief executive of Socar’s Turkey unit, didn’t reply to phone calls seeking comment. Silvia Lamberti, a Vienna- based spokeswoman for Unicredit, declined to comment.

The US Ex-Im Bank approved a $641 million loan to finance the export of equipment to Turkey for the project, its chairman Fred Hochberg said in December. The move will support exports of “cutting-edge American equipment” and support 3,000 jobs in the US, he said.

As well as naphtha, the refinery will produce 4.9 million tpy of diesel and 1.63 million tons of jet fuel, Yavuz said. It will also make liquefied petroleum gas and petro-coke.

Construction will take less than five years, Yavuz said in May 2013.