SOCAR: Share of local petroleum products may increase in Azerbaijan’s energy balance
Baku, Azerbaijan, Nov. 27
By Leman Zeynalova – Trend:
The share of local petroleum products may increase in Azerbaijan’s energy balance after completing the modernization of the Baku Heydar Aliyev Oil Refinery, Public Relations Head at Azerbaijan’s state oil company SOCAR Ibrahim Ahmadov told Trend.
"As for the import of petroleum products to Azerbaijan, the products of Baku Refinery meet the major part of domestic demand. Local products meet around 95 percent of the domestic demand and this tendency will continue in the future as well. The share of local petroleum products in the country’s energy balance may increase after completing the modernization of Baku Refinery," he said.
Ahmadov noted that SOCAR has not imported fuel oil to Azerbaijan this year.
He pointed out that the import of petroleum products to Azerbaijan in 2018 is limited to certain volumes of jet fuel (in addition to the produced volumes) to meet the growing demand of local airlines, as well as high-octane gasoline (Premium and Super) and A-92 gasoline only during the period of repair work at the refinery.
Since SOCAR carries out trade operations all over the world, petroleum products also hold an important place in its portfolio, noted Ahmadov.
"The import of petroleum products, for example, gasoline to Azerbaijan is usually more expensive than domestic production. This is due to the fact that the international market prices for main types of fuel used in Azerbaijan are much higher than the sales prices in the country, even excluding customs and transportation costs," he said.
Ahmadov went on to add that the products of Baku Refinery, or the products that are not in high demand in the country, for example, Premium and Super gasoline (95 and 98) are exception.
"Depending on the demand level, in certain periods, the import of small volumes of products that are not in high demand may be more profitable and commercially more efficient than producing the same product in the country, since the level of product profitability is often proportional to demand and production volumes," he said.
Currently, Baku Refinery is undergoing modernization, which will be completed in 2021. Following the modernization, the refinery’s capacity will increase from 6 million tons per year to 8 million tons per year, while its operational term will be extended until 2040.
The cost of modernization of the Heydar Aliyev Oil Refinery is estimated at around $2.2 billion.
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