SOCAR lets contract for Baku refinery modernization

State Oil Co. of Azerbaijan Republic (SOCAR) has let a contract to the SOCAR-KBR LLC joint venture to provide project management consultancy (PMC) for the ongoing modernization and expansion of the Heydar Aliyev refinery at Baku in Azerbaijan.

To be executed from its offices in Baku, SOCAR-KBR will deliver all PMC services for the project, which will increase the refinery’s crude processing capacity to 7.5 million tonnes/year from its current 6 million-tpy capacity, KBR said.

In addition to increasing catalytic cracking capacity at the plant to 2.5 million tpy from 2 million tpy, the upgrading and modernization overhaul also will enable the refinery to produce 100% of fuels meeting Euro-5 quality standards, as well as high-quality raw feedstock that will be transported via pipeline to an associated ethylene and polyethylene plant operated by SOCAR subsidiary Azerikimya Production Union (OGJ Online, Feb. 11, 2016).

Currently one of the most important investments for SOCAR globally, the modernization of the Heydar Aliyev Baku oil refinery is to begin immediately and will be completed by late 2018, KBR said.

While KBR did not disclose a specific value of the PMC contract, the service provider did confirm the estimated capital cost for the refinery’s entire modernization program is about $1 billion.

Already under way, the refinery revamp program follows the Jan. 1, 2015, shutdown and subsequent merger of processing activities at SOCAR’s Azerneftyag refinery with those of the nearby Heydar Aliyev refinery as part of the company’s plan to eliminate economically inefficient production activities and management structures associated with the operation of two separate refineries (OGJ Online, Dec. 29, 2014).

Contact Robert Brelsford at rbrelsford@ogjonline.com.

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