On February 27, SOCAR Polymer Plant produced the first polypropylene product for demonstration and testing purposes, with the participation of SOCAR President Rovnag Abdullayev and company vice-presidents.
As part of a working visit to Sumgait, the SOCAR President inspected Azerikimya Production Union (PU), SOCAR Carbamide and SOCAR Polymer before the production starts in the new plants.
The modernisation and development of existing and new facilities within Azerikimya PU is currently underway and is expected to be completed in 2019.
Construction work at the SOCAR Carbamide Plant is at the completion stage with final testing work due to start in a month. The production of ammonia, the first product in the plant is scheduled for August 2018. Another product, nitrogen fertilizer (carbamide) is expected in October. Approximately 150,000 tonnes of carbamide will meet domestic demand while saving $55 million spent annually on fertilizer imported to Azerbaijan. The remaining capacity, of approximately 500,000 tonnes will be exported, yielding additional revenue for the country.
SOCAR Polymer consists of Polypropylene (PP) and High Density Polyethylene (HDPE) plants. The commissioning of both plants is scheduled for the 2nd and 4th quarters of 2018. Employees have been recruited and are currently following professional development programs and receiving specialised training. The digitalisation of the SOCAR Polymer plants will be managed through SAP (Systems Analysis and Program Development) modules to enhance industrial efficiency.
In the course of production test, the polypropylene pellet cutting was launched and the final polypropylene product produced for the first time.
SOCAR President Rovnag Abdullayev said: “The revival of the chemical processing industry in Sumgait is a new and sustainable source of income for our country. Three major projects of SOCAR in the processing and chemical industry are to be completed this year. Commissioning of the STAR Refinery in Turkey, SOCAR Carbamide and SOCAR Polymer in Azerbaijan this year will give extra momentum to the next stage of the overall mission, which adds value to our national wealth.”
The largest chemical enterprises - SOCAR Polymer and SOCAR Carbamide, built in the region in recent years, will be put into operation this year. An important feature of SOCAR's projects in the chemical industry is that these enterprises will establish a value chain with other companies of SOCAR. The Heydar Aliyev Oil Refinery will be integrated into the value chain with an Ethylene-Polyethylene Plant of Azerikimya and two plants of SOCAR Polymer in Sumgait, which will ensure higher efficiency in the production. By contributing to the raw material supply of the Petkim Complex, another strategic asset of SOCAR, STAR Refinery in Turkey will connect the two enterprises in a single value chain.
SOCAR Methanol, a subsidiary of SOCAR, branched out into a new type of product - analytical methanol, kick starting the production of first end consumer product in the gas chemical industry in Azerbaijan.
Analytical methanol is used as a chemical reagent in laboratories. Currently, SOCAR Methanol offers analytical methanol to consumers in various packaging. It has already reached agreement with several local companies and delivered the first consignment.
SOCAR Methanol’s product is released under the brand of SOCAR and trademark of “Made in Azerbaijan”. SOCAR is capable of delivering analytical methanol not only to the local market, but to laboratories in Turkey, CIS and Western Europe as well.
According to world standards, only methanol with a minimum purity level of 99.9% can be used as analytical methanol. SOCAR-produced analytical methanol has a purity level of 99.98%. Its quality is tightly controlled by the company’s chemical laboratories and internationally-approved inspecting entities.
Elnur Mustafayev, CEO of SOCAR Methanol, said: “The start of analytical methanol production today opens a new page in the country’s processing industry. SOCAR traditionally produced intermediate products in the gas chemical industry is now becoming the producer of end consumer products. Thus, SOCAR has made one more important step toward becoming an internationally integrated company”.
The construction of the methanol plant began in 2008 and operations started in 2013. It has the capacity to produce 700,000 tons a year and is the first production facility in the gas chemical industry in Azerbaijan. British ICI low-pressure methanol production technology was used in its structure. Natural gas and steam are the raw materials used in the process.
SOCAR has increased oil and gas processing and chemical industry investments in recent years and has initiated several large-scale projects within Azerbaijan and abroad. Alongside Azerikimya and SOCAR Methanol, there are two additional plants that will start operating this year: SOCAR Polymer and SOCAR Carbamide plants. The construction of the new plants and ongoing modernization of existent refining facilities is going to diversify SOCAR’s product portfolio and increase revenues of the country. They will contribute by generating employment and enhancing the diversification of the national economy.
Previously, SOCAR AQŞ won the international tender announced by BAPEX and will drill two exploration and one appraisal well in Bangladesh.
A delegation led by Mohammad Shahidul Haque, Senior Secretary of Legislative and Parliamentary Affairs Division and Nazimuddin Chowdhury, Secretary of Energy and Mineral Resources Division met with Ramin Isayev, SOCAR AQS's Director General, as part of their visit to Azerbaijan. During the meeting, SOCAR AQŞ and Bangladesh Petroleum Exploration and Production Company Ltd (Bapex) signed a Memorandum of Understanding on cooperation in the new oil and gas projects of the People's Republic of Bangladesh. The memorandum was signed between Deputy Director of SOCAR AQS Eldar Yaradanguliyev and Bapex Managing Director Naushad Islam.
After winning the international tender previously announced by BAPEX, SOCAR AQŞ will conduct the drilling and construction of the onshore wells: Semutang Dakkhin 1, Begumganj 4, and Modarganj 1. Two wells will be drilled for exploration and one well for appraisal purposes. The Memorandum of Understanding, signed in Baku, is an important step towards expanding the future cooperation beyond the drilling of these wells.
During the signing ceremony of the MoU, Secretary of Energy and Mineral Resources Division Nazimuddin Chowdhury said: “There is a promising outlook for energy cooperation between the two countries. Today's signing ceremony will give a special impetus to the development and deepening of cooperation between the two companies and two countries.”
Bapex Managing Director Naushad Islam said: “Rich experience of Azerbaijani oil workers has always been the best school for our region's oil industry workers. The innovative image of SOCAR AQS in the national drilling industry and the projects pioneered by the company, have played an important role in realisation of this cooperation. I am assured that we will continue to cooperate with SOCAR AQŞ on other projects as well!”
Director General of SOCAR AQS Ramin Isayev said: ''In accordance with the export oriented policy of our country, SOCAR AQS participated and won the international tender in the field of drilling services, announced by BAPEX. We are proud to participate in the development of oil and gas fields in the People's Republic of Bangladesh, where economy grows about 7% per year, and we look forward to expand our cooperation!”
SOCAR AQS LLC was established as an integrated drilling and well services management company between SOCAR and Absheron Drilling Company (AQS) in 2007. The core business of the company is to provide a complete package of wells by providing modern techniques and technologies. SOCAR AQS has conducted over 200,000 metres of drilling works up to date and has delivered 67 wells to its’ customers.
The company is currently drilling four wells in Azerbaijan. SOCAR AQS plans to drill 18 wells in the Azerbaijani sector of the Caspian Sea in 2018. Export of drilling services to the People's Republic of Bangladesh, which started gas production in 2008 and holds approximately 360 billion cubic metres of gas resources, will provide auspicious opportunities for the Azerbaijani oil industry workers to offer their professional services internationally and generate additional revenues for the national economy.
SOCAR will provide the initial engineering design services in Albania. An agreement was reached on establishing a new company for the design of the Ionian-Adriatic Pipeline (IAP) to be connected to the Southern Gas Corridor.
Two documents on the design of the new pipelines to join the Southern Gas Corridor were signed by SOCAR and Albanian Albgaz, as well as gas distribution companies from Montenegro, Croatia, and Albania, at Heydar Aliyev Centre in Baku. The signing ceremony was held during the Fourth Ministerial Meeting of the Southern Gas Corridor Advisory Council.
The Front End Engineering Design (FEED) of the new pipelines, to be constructed between the two Albanian cities of Fier and Vlora will enable the distribution of natural gas from SGC to Albania and be carried out by SOCAR Balkan. SOCAR will be conducting engineering services in Balkan countries for the first time. The letter of intent on the designof the pipeline between Fier and Vlora was signed by Murad Heydarov, SOCAR Balkan CEO and Advisor to SOCAR President, and Genci Gjeçi, Albgaz CEO.
Azerbaijan and Albania signed an Intergovernmental Memorandum of Understanding in 2014 and started work on the development of the master plan for the gasification of Albania. Since that time, along with other interested parties such as the European Union, Energy Community, Swiss Government, TAP, and Enagas, SOCAR Balkan (100% subsidiary of SOCAR) has provided consulting services in the Albanian gasification plan, as well as dealing with the implementation of Azerbaijan's gas export strategy in the Balkans. As a result of the feasibility study on Albania's gasification in January 2017, it was determined that the construction of a gas pipeline between Fier and Vlora was a necessity. The pipeline will connect the TAP’s compressor station near Fier to a gas plant in Vlora. The pipeline will be approximately 40 km in length with an annual capacity of 1 billion cubic meters.
Another letter of intent outlines the establishment of a new company for designing the Ionian-Adriatic Pipeline (IAP). The IAP project, where SOCAR provides technical consulting services, will connect the TAP pipeline to Croatia's gas distribution system, enabling the transportation of natural gas across the Southeast, Central and Eastern Europe. The IAP project which is envisaged to be 249 km in Croatia, 95 km in Montenegro and 167 km in Albania, will generate a total of 5 billion cubic meters of natural gas for the Balkan countries. The letter of intent for establishment of the IAP design company was signed by Albgaz CEO Genci Gjeçi, Montenegro Bonus Executive director Aleksandar Kašćelan, and the Board Member of Croatia’s Plinacro Daria Kristicevic.
“Several EU and Balkan countries are keen to increase the share of natural gas in their domestic energy supply and to cooperate with Azerbaijan as part of Southern Gas Corridor project. This is because the natural gas is the cleanest fossil fuel for the environment. The realisation of this interest requires the construction and expansion of the gas infrastructure that has not yet been developed or remains underdeveloped in those countries. The projects established today, will diversify the export routes of Azerbaijan’s gas and serve both the commercial interests of Azerbaijan and energy security of the importing countries”: SOCAR Balkan CEO and Advisor to SOCAR President Murad Heydarov said.
The primary objective of the IAP project is to transport natural gas from the TAP pipeline, which is a part of the Southern Gas Corridor, to various European countries across the Balkan countries. The Fier-Vlora pipeline is planned as part of the gasification of Albania. Stretching over 3,500 km, the Southern Gas Corridor is a mega pipeline project aimed at transporting natural gas to Europe crossing two continents and six countries. The Southern Gas Corridor consists of four main parts: Shah Deniz Phase-2, South Caucasus Pipeline Expansion, construction of TANAP and TAP pipelines. SOCAR represents the Azerbaijani state in all stages of the Southern Gas Corridor. The Shah Deniz Phase-2, South Caucasus Pipeline Expansion, and TANAP projects will be completed and become operational this year.
The contract relates to the construction of the New Units on an EPC lump-sum basis as part of the Modernisation and Reconstruction of the Heydar Aliyev Baku Oil Refinery in Azerbaijan
On February 1, SOCAR’s Heydar Aliyev Refinery and Tecnimont/Kinetics Technology Alliance signed an EPC contract for the construction of new facilities as part of the reconstruction and modernisation of the Refinery.
SOCAR proceeds with the revamp of the Heydar Aliyev Oil Refinery with the objective of advancing the quality of fuel and lubricants in Azerbaijan and increasing the volume of production. After finishing the Front-end Engineering Design (FEED), tenders for the next phase of revamp - Engineering, Procurement, and Construction (EPC) were announced. The EPC phase of Refinery consists of two parts: construction of new units and reconstruction of the existing ones.
The tender for the construction of new units was announced on 10th of February, 2017. Five international companies participated in the selection process. The subsidiaries of Maire Tecnimont S.p.A. - Tecnimont S.p.A. and KT-Kinetics Technology S.p.A. were selected with the highest score for the construction of new facilities. The deal includes the construction of more than 10 new production units. The tender for the reconstruction of existing units has been granted to Técnicas Reunidas, which won the qualifying proceedings last December.
A number of senior executives, as well as the Italian ambassador to Azerbaijan H.E. Mr. Augusto Massari attended the signing ceremony at SOCAR Tower. The contract was signed by Elman Ismayilov, CEO of Heydar Aliyev Refinery and Pierroberto Folgiero, CEO Maire Tecnimont.
Rovnag Abdullayev, President of SOCAR said: “Today we have made one more step toward the production of high-quality Euro 5 standard compliant diesel, gasoline and other fuels. Maire Tecnimont S.p.A. is one of the global leading companies, and our cooperation will enable us to supply high-quality fuel to Azerbaijan’s domestic market as well as to increase the export revenues in the years ahead.”
Pierroberto Folgiero, Maire Tecnimont Chief Executive Officer said: “After our two strategic petrochemical projects in Azerbaijan, this contract enables Maire Tecnimont Group to consolidate the fruitful relation with SOCAR also in the refining business, supporting the strategy of integration with the petrochemical business. We are truly honoured to keep on supporting such a prestigious client in the development of the country’s hydrocarbons downstream sector.”
Mentioning the fruitful cooperation with SOCAR’s Baku Higher Oil School in terms of educating and training local professionals in Azerbaijan, he also stressed Tecnimont’s intention to expand this cooperation after signing the new contract.
The revamp of the refinery is managed by SOCAR-KBR/KBR as managing contractor of the project. The completion is scheduled for 2021. The first phase of the project covers the construction of a new bitumen plant, new LNG station and other related facilities. Second phase comprises the construction of Euro 5 diesel production units and reconstruction of the related facilities by the end of 2020. At the end of the third phase, the refinery is set to commence the production of Euro 5 standard compliant A-92/95/98 gasoline by the beginning of 2021.
The modernisation project will raise the quality of fuel to the Euro 5 standard and increase the production volume to 7.5 MMTPA. The revamp will ultimately boost the export potential and profitability of the refinery. The revamped units will also feed the facilities of Azerikimya PA. The project is expected to optimize the operational expenses of refinery and improve the environment in Baku.
Listed on the Milan Stock Exchange Maire Tecnimont Group is a leading international player in Engineering & Construction, Technology & Licensing, and Energy Business Development & Ventures. The Group is among the top-ranking worldwide engineering contractors. It has 8 000 highly skilled professionals working in the oil and gas processing, petrochemicals and fertilizer industries in about 40 countries and 50 operating companies. The Group offers high-quality services in Licensing, Engineering Services, EP (Engineering, Procurement) and EPC (Engineering, Procurement and Construction). Tecnimont/Kinetics Technology Alliance, as a part of the Group, is operating in similar sectors. Tecnimont has already been involved in SOCAR Polymer petrochemical project as its EPC contractor. The company previously signed an EPC deal with SOCAR on the construction of brand new polypropylene and high-density polyethylene plants.