Azerbaijan plans refinery, gas processing plant in Baku

Eric Watkins
OGJ Oil Diplomacy Editor

LOS ANGELES, May 21 -- State Oil Co. of Azerbaijan (SOCAR) plans to build an oil and gas processing and petrochemical complex near Baku, scheduled for completion between 2018 and 2020.

"Subject to the decision of the government, the next step will be basic engineering design for all new complex facilities,” SOCAR said of the facility, to be build 45-50 km south of Baku at Sangachal, where the Caspian’s main oil and gas pipelines reach shore.

SOCAR said the planned facility would include a 40-billion cu m gas processing plant, a 300,000 b/d refinery, as well as chemical, petrochemical, and power plants.

Analyst IHS Global Insight earlier said that “a new petrochemical complex would give the country another outlet for rising offshore oil and gas production, with some of these volumes sent for processing at the new complex rather than simply exported as raw materials.”

Feasibility study under way
Technip SA and Foster Wheeler Ltd. are conducting the feasibility study of the complex as well as SOCAR's existing downstream facilities, including the Baku Oil Refinery and the Oil Refinery Azneftyag, both in Baku.

In this year’s first quarter, the two refineries produced more than 1.24 million tons of oil products compared to about 1.12 million tons in first-quarter 2009.

“We expect to receive a project concept, feasibility in July, and we are preparing for the procedure to start this project,” said SOCAR Pres. Rovnag Abdullayev. “We are working with the Ministry of Economic Development to attract investment funds and private companies to build these plants,” he said of the new industrial park.

Abdullayev also noted that more investment should be made in the country’s existing refineries to improve the quality of SOCAR-produced fuel to the standards of Euro-4 and Euro-5.

"The diesel fuel and gasoline produced by SOCAR comply with the standards, and the diesel fuel already meets the European standards. Euro-2 standards will be applied to gasoline from this year, and next year we will be able to introduce Euro-3 to gasoline produced by the company," said Abdullayev.

In April, SOCAR's Vice-Pres. for Refining Davud Mamedov said construction of the new refinery at Sangachal would start in late 2014 or early 2015, and that refining would start in 2018-19.

According to state media, several officials insist that Euro-6 gasoline should be produced at the new refinery, according to the European standards that will be applied from 2014 on.

Contact Eric Watkins at hippalus@yahoo.com.



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