SOCAR Polymer plant to strengthen non-oil export

By Azernews

By Narmina Mammadova 

The role of hydrocarbons as a raw material for the non-oil sector is increasing, and therefore the Azerbaijani State Oil Company (SOCAR) confidently breaks out in first place in the list of exporters of non-oil products.

In January-October 2018, the Department of Marketing and Economic Operations of SOCAR delivered non-oil products for $151.5 million, which is 28.9 million, or 23.6 percent more than in the same period of last year, the report “Export Review” of the Center for Analysis of Economic Reforms and Communications said.

According to the results of January-October 2018, the total export of the non-oil sector amounted to 1.351 billion manats, which is 132 million, or 11 percent, more than in January-October 2017 - and, in this indicator, SOCAR accounted for 11.5 percent.

At the same time, the share of non-oil products of the Azerbaijani State Oil Company should quickly grow. 

In July 2018, the polypropylene plant SOCAR Polymer was launched. At the first stage, SOCAR Polymer’s production capacity will be 120,000 tons of polyethylene and 184,000 tons of polypropylene. The volume of exports of the plant, according to forecasts, this year will be 15,000 tons. By 2021, the total capacity can reach 570,000 tons of products.

The plant will produce 19 types of products from polypropylene and 12 types of products from high density polyethylene. The products will be used, in particular, in the food and medical industries, as well as in agriculture and car manufacturing.

The supplier of raw materials for the plant is Azerkimya PU. After switching to full capacity, the plant will purchase 23 tons of propylene per hour from the Azerikimya.

Nitrogen installation for plants for the production of polypropylene and high density polyethylene are based on the most advanced technical and engineering solutions.

The SOCAR Polymer project is the first of such a scale in the petrochemical industry of Azerbaijan for the last 40 years. The second plant was expected to be put into operation in the last quarter of 2018.

The total investment costs of the project are estimated at $816 million. The credit in the amount of $489 million has been allocated to SOCAR Polymer by Russian Gazprombank for a period of 10 years.

The production of raw materials at the SOCAR Polymer plants will contribute to the creation of hundreds of small and medium-sized enterprises and to the development of production of various types of import-substituting products. According to calculations, the activity of the plants producing polypropylene and high-density polyethylene SOCAR Polymer will yield an income of $8 billion.

At present, Azerbaijan imports polypropylene and thanks to the launch of the plant, it is planned to fully meet domestic demand and increase export potential.

It is expected that 30 percent of the products will be sold on the domestic market, the rest will be exported to Turkey, Europe and the CIS countries.

In general, fruit and vegetable products traditionally lead in the export of the Azerbaijan’s non-oil sector, the export of which amounted to $ 405.5 million in January-October 2018. So, given the potential of the SOCAR Polymer plant, this will probably push the production of fruits and vegetables to the background in national non-energy exports very soon.

Thus, the main growth in exports of non-oil products of SOCAR can be expected in 2019.

SOCAR Polymer was established in July 2013 to accelerate the development of the chemical industry. The company received the status of the second resident of the park. SOCAR Polymer covers 30 hectares of the park territory.

SOCAR is a wholly state-owned national oil company headquartered in Baku, Azerbaijan. The company produces oil and natural gas from onshore and offshore fields in the Azerbaijani section of the Caspian Sea.

The company includes three production associations, one oil refining and gas processing enterprise, an oil flotilla, a deep-water base plant, two trusts, one institute, and 23 structures.

It has representative offices in Georgia, the U.S., Turkey, Romania, Austria, Switzerland, Kazakhstan, Great Britain, Iran, Germany, Ukraine, Belgium and Canada.