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Review of oil and gas operations in Azerbaijan (January-September 2017)

Analysis Materials 1 December 2017 10:16 (UTC +04:00)

1. FEC

а) Oil and Gas Production

In January-September 2017, 28.79 million tons of oil and gas condensate were produced in Azerbaijan, which is by 8 percent less than in the same period of 2016.

In 2016, 41.03 million tons of oil and gas condensate were produced in Azerbaijan, which is by 1.5 percent less than in 2015.

The main volume of oil production in Azerbaijan accounts for the Azeri-Chirag-Gunashli (ACG) block of oil and gas fields.

The production of commercial gas in Azerbaijan stood at 13.51 billion cubic meters in January-September 2017, which is by 3.4 percent less than in the same period of 2016, according to the State Statistics Committee.

The commercial gas production stood at 18.71 billion cubic meters in Azerbaijan in 2016, as compared to 19.72 billion cubic meters in 2015.

- The Shah Deniz consortium led by BP has announced the launch of Khankendi – a new flagship vessel for the Caspian Sea. The state-of-the-art subsea construction vessel has been specifically designed and built to install the biggest subsea production system in the Caspian Sea as part of the Shah Deniz Stage 2 project. The official inauguration of the new vessel worth $378 million took place in Baku.

- The Heydar Aliyev Baku Oil Refinery has resumed the manufacture of oil products. The refinery suspended the manufacture of oil products in August due to the scheduled repair work.

- Azerbaijan’s state oil company SOCAR started delivering methanol to Kazakhstan through the Caspian Sea.

- SOCAR has launched a new environmental project at the Heydar Aliyev Baku Oil Refinery.

SOCAR said that after commissioning of a new water cooling unit at the refinery, the amount of polluted industrial water, going to the mechanical purification site of Ekol Engineering Services CJSC, dramatically decreased.

- The Shah Deniz consortium has announced the sail away and offshore installation of the second topsides unit built for Azerbaijan’s Shah Deniz Stage 2 project - the topsides of the Production and Risers (PR) platform.

“The PR platform topsides unit, which was completed ahead of schedule, sailed away to the Shah Deniz contract area in the Caspian Sea from the Azfen fabrication yard in Bibi-Heybat on 15 September. Prior to that, the topsides unit was jacked up onto the load-out frame at the quayside of the fabrication yard on 6 August 2017 and was transferred onto the STB-1 transportation barge on 9 September in preparation for sail away,” said BP.

The Ethylene-Polyethylene plant of SOCAR’s Azerikimya Production Union resumed production. The plant was stopped for maintenance work on August 10.

- SOCAR will additionally produce 69.35 million cubic meters of gas and more than 1,800 tons of condensate per year through commissioning after major overhaul a well at the Gunashli offshore field.

b) Processing

Azerbaijan produced 3.41 million tons of oil products in January-September 2017 compared to 4.02 million tons in the same period 2016.

SOCAR, which is the sole producer of oil products in Azerbaijan, is currently modernizing its processing facilities as the fuel consumption has increased in the country.

Azerbaijan produced 874,200 tons of gasoline in January-September 2017, which is 5.1 percent more than in the same period 2016.

In 2016, Azerbaijan produced 5.17 million tons of oil products compared to 5.45 million tons in 2015.

Azerbaijan’s output of oil products in January-September 2017

Oil product

January-September 2017, in 1,000 tons

Compared to Jan.-Sept. 2016 (%)

Gasoline

874.2

105.1

Naphtha

130.7

99.4

Kerosene

445.4

94

Diesel fuel

1.362

79.1

Fuel oil

258.1

59.3

Lubricants

24.3

by 3.2 times

Oil bitumen

158.7

114.6

Oil coke

152.4

109.3

2. Chemical complex

Azerbaijan produced 221,500 tons of methanol in January-September 2017, which is by 87.9 percent more than in the same period of 2016.

Meanwhile, 34,000 tons of propylene were produced in Azerbaijan in January-September 2017, which is by 7.3 percent less than in the same period of 2016.

In January-September 2017, 64,800 tons of polyethylene were produced in Azerbaijan (a decrease by 6 percent as compared to January-September 2016).

Data on production of main chemicals:

Products

Jan.-Sept. 2017

Compared to Jan.-Sept. 2016 (%)

Nitrogen (million cubic meters)

17.23

103.2

Polyethylene (thousand tons)

64.8

94

Ethylene (thousand tons)

66.7

93.8

Propylene (thousand tons)

34

92.7

Isopropyl alcohol (thousand tons)

9.35

125

Methanol (thousand tons)

221.5

187.9

Paint products (thousand tons)

8.32

141.1

Iodine (tons)

146.5

93.7

Oxygen (thousand cubic meters)

2,354.1

32.7

3. Electricity

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Azerbaijan’s power plants generated 16.97 billion kilowatt hours of electricity in January-September 2017, which is 1 percent more than in the same period 2016.

According to the report, 16.25 billion kilowatt hours of the total electricity generated in January-September 2017 accounted for commercial electricity, which is 1.3 percent more than in the same period 2016.

Thermal power plants generated 14.78 billion kilowatt hours of the total commercial electricity in January-September 2017, which is 2.5 percent more than in the same period 2016.

Azerbaijan’s hydro-power plants generated 1.43 billion kilowatt hours of commercial electricity in January-September 2017, which is 8.2 percent less than in the same period 2016.

Wind farms produced 9.6 million kilowatt hours of electricity, while solar power plants generated 32.6 million kilowatt hours of electricity in the reporting period.

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