Major events in Caspian countries' oil and gas industry for last week (Sept. 18-22)
One of Azerbaijan’s biggest chemical plants resumes production
The Ethylene-Polyethylene plant of Azerbaijani state oil company SOCAR’s Azerikimya Production Union resumed production, a source at the plant told Trend.
The plant was stopped for maintenance work on August 10.
New automated control systems were installed during the maintenance, according to the source.
Azerikimya is currently modernizing and reconstructing its enterprises. The project for reconstructing the Ethylene-Polyethylene plant, which is implemented by Technip Italy and will be completed by 2019, envisages the upgrade of the existing technological units and construction of new facilities.
This will allow increasing the production capacity of Azerikimya, providing raw materials to the polypropylene and polyethylene plants that are currently under construction, covering domestic demand, increasing export potential, as well as enhancing stability and safety of the technological process.
Azerbaijan decides on base oil price in 2018 state budget
Azerbaijan’s government has based its projections for 2018 state budget on an oil price of $45 per barrel, a source in the government told Trend.
Today, Azerbaijan’s Ministry of Finance submitted a draft state budget and a draft consolidated budget for 2018, as well as consolidated budget indicators for the next three years to the Cabinet of Ministers.
Previously, Azerbaijani government used to prepare several different scenarios with different oil prices. For example, the average annual oil price was projected at $35, $40 and $45 per barrel for the 2017 state budget.
The source did not specify why one option was used when preparing the state budget for 2018. Other parameters of the state budget are yet unknown.
The budgeted oil price set by the Azerbaijani government roughly equals forecasts of its neighbors. Russian media outlets earlier reported that the country's budget for 2017-2019 will be pegged on an oil price of $40 per barrel. In Kazakhstan, the budgeted oil price was $45 per barrel.
During the year, the price of Brent crude increased by 20.17 percent to stand at $55.25 per barrel on Sept. 18.
The price of Azerbaijan’s Light oil increased by 22 percent during the year and amounted to $58.3 per barrel on Sept. 15.
Experts and international financial institutions cannot reach an agreement on future oil prices. Some of them, for example, the International Monetary Fund (IMF) downgraded its forecasts. In July, the IMF lowered forecasts for 2017 and 2018 by about $3, down to $51.9 and $52 per barrel, respectively.
Other financial institutions, such as the World Bank and the international ratings agency Moody's have rather positive forecasts.
According to the World Bank, the oil price will be $55 per barrel in 2017 and $60 per barrel in 2018. Moody’s expects the oil price to vary between $40 and $60 per barrel in the near future.
SOCAR: TANAP section to Turkey’s Eskisehir to be ready by mid-2018
Construction of the Trans-Anatolian Natural Gas Pipeline (TANAP) has been completed by 82 percent, Rovnag Abdullayev, president of Azerbaijan’s state oil company SOCAR, said.
He made the remarks in Baku at an event dedicated to the Oilmen Day.
He said the TANAP section to Turkey’s Eskisehir will be ready by mid-2018.
Abdullayev also said the work to expand the South Caucasus Pipeline has been completed by over 90 percent.
TANAP project envisages transportation of gas from Azerbaijan's Shah Deniz field to the western borders of Turkey. The gas will be delivered to Turkey in 2018 and after completion of the Trans Adriatic Pipeline's construction the gas will be delivered to Europe in early 2020.
The length of TANAP is 1,850 kilometers with an initial capacity of 16 billion cubic meters of gas. Around six billion cubic meters of this gas is meant to be delivered to Turkey, with the remaining volume to be supplied to Europe.
The project’s total cost is estimated at $8.5 billion.