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Oil, gas and petrochemicals: Azerbaijan

Hydrocarbon Engineering,


BMI have said that they remain largely bearish with regards to the outlook for oil production. Energy Information Administration (EIA) data indicates that production continues to disappoint and BMI estimate crude output of 883 000 bpd for last year.


With regards to natural gas, the outlook for gas projects remains promising, according to BMI, however, BP officials have warned that there was a 25% reduction in long term European demand from Azerbaijan which could slow plans to develop recent offshore discoveries. The lack of available rigs is also a problem when it comes to developing gas resources in the Caspian.

In the medium term however, BMI expect gas output to experience only incremental grown or possibly be subject to small annual declines. This is due to a lack of major projects in the pipeline.


According to BMI, Azerbaijan is set to move ahead with the expansion of petrochemicals capacities this year, and this should boost the country’s non-oil sector over the medium term. The petrochemicals sector is expected to contribute significantly to the development of the non-oil economy, providing the basis of growth in downstream manufacturing as well as exports. It will also be able to move the country towards self sufficiency in some segments, particularly polyethylene and methanol, according to BMI. This should even out the impact of volatile oil output growth on the wider economy.

SOCAR has plans to start construction of a new petrochemical and oil/gas processing complex in Sangachi and the US$ 17 billion complex is scheduled for startup by 2018 at the latest. The facility is set to include a gas processing plant with capacity for 10 billion m3, a 10 million tpy refinery and a petrochemicals plant with capacities of 700 000 tpy high density polyethylene and low density polyethylene, 550 000 tpy polypropylene, 40 000 tpy benzene and 110 000 tpy styrene. It is possible that the new complex could be integrated with the existing Azerkimya complex, which has been operating at less than 20% capacity for a number of years.

Adapted for web by Claira Lloyd

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