Major events in caspian countries' oil and gas industry for last week (Feb. 26-March 2)
SOCAR Polymer plant launches test production of polypropylene
The first cargo of polypropylene was produced for testing purposes at the SOCAR Polymer, a polymer plant of Azerbaijan's state oil company SOCAR, in Sumgait city on Feb. 27, the SOCAR said in a message Feb. 28.
The test production process took place with the participation of SOCAR President Rovnag Abdullayev. As part of the working visit, Abdullayev visited facilities of the Azerikimya Production Union, a carbamide plant and the SOCAR Polymer plant.
"The work continues to update the technological units of the Azerikimya Production Union," the message noted. "The company is also working on the construction of new units and auxiliary sites. Azerikimya's modernization will be completed in 2019."
Construction is at the completion stage at the SOCAR carbamide plant, and the adjustment work will begin in a month.
"Production (of ammonia) at the plant will be launched in August, and it is planned to start producing carbamide in October," the message said. "As many as 150,000 tons of products will meet the consumption needs in the domestic market, and Azerbaijan will annually save $55 million, which are spent on the imports of carbamide. The remaining 450,000-500,000 tons of products will be sent for exports."
The polypropylene plant as part of the SOCAR Polymer project will be launched in the second quarter of this year, and the polyethylene plant will be launched in the fourth quarter of this year.
The SOCAR Polymer project is carried out in Sumgait Chemical Industrial Park.
At the first stage, production capacity of SOCAR Polymer will total 120,000 tons of polyethylene and 180,000 tons of polypropylene. The total capacity may reach 570,000 tons by 2021.
BP, SOCAR Turkey enter into licensing agreement
BP and Azerbaijan's SOCAR TURKEY ENERJI A.S. (SOCAR Turkey) have entered into a licensing agreement for BP's latest generation purified terephthalic acid (PTA) technology, said a message from BP.
SOCAR Turkey intends to deploy the technology in its new 900,000 tons per annum (tpa) unit at Aliaga, Turkey, expected to come on stream by 2023 once the final investment decision is taken.
"BP is committed to providing products and solutions to help our customers reduce their carbon footprint. We are proud to build on BP's long-standing relationship with SOCAR Turkey to license and deploy this technology into their facility in Turkey. This is a testimony to the advantages of BP's technology," said Rita Griffin, chief operating officer, BP Petrochemicals.
"This investment is highly strategic for us, fulfilling our intent to create a value chain by integrating our newly-announced aromatics complex adjacent to the STAR refinery and PETKİM plant in Aliaga with the most competitive PTA technology. This will create the most competitive asset in Turkey and the Middle East and will serve the high demand for PTA in Turkey and surrounding regions," said Emil Eminov, SOCAR Turkey chief operating officer.
BP Petrochemicals' PTA technology has significantly lower capital and operating costs when compared with other PTA technologies. The technology is more energy efficient, uses less water and produces less solid waste than similar technologies on the market. BP Petrochemicals continues to invest in proprietary PTA technology to maintain its position as a market leader and technology of choice. New innovations are available to licensees.
PTA is the primary feedstock for polyesters used in the textile and packaging industry.
SOCAR TURKEY ENERJI A.Ş (SOCAR Turkey) is a subsidiary of SOCAR, the State Oil Company of the Azerbaijan Republic, and is Turkey's largest international investor with multiple investments in the energy area.
SOCAR Turkey's investments include: PETKİM, Turkey's leading petrochemicals manufacturer; STAR Refinery, which is due to begin operations in 2018; and PETLİM, the largest container port on Turkey's Aegean Sea coast. SOCAR Turkey intends to construct a new aromatics unit to produce paraxylene (PX) unit adjacent to the newly-constructed STAR refinery located in Aliaga.
SOCAR to start drilling appraisal well at Karabakh field by year-end
Azerbaijan's state oil company SOCAR will start drilling the KPS-4 appraisal well at the Karabakh oil and gas field in 3Q2018, Project Manager Nusrat Aliyev said.
He made the remarks at a public hearing on the Environmental Impact Assessment (EIA) document, prepared as part of a project to drill an appraisal well in the water area of the Karabakh field in the Azerbaijani sector of the Caspian Sea.
According to him, the initial design work will be completed at the field by the end of this month.
Aliyev said that drilling operations will be carried out as part of the agreement signed in December 2017 between SOCAR and Statoil on the main commercial principles of the risk-service contract for the development of the Karabakh oil and gas field.
The Karabakh oil and gas field, opened in 2000, is located 130 kilometers east of Baku. The depth of the sea varies in the range of 250-450 meters at the field. The initial oil reserves of the field are estimated at 100 million tons.
SOCAR is the operator of the field's development. The company expects to obtain the first production from the field in 2021.
SOCAR names new head of light-end oil trading
SOCAR Trading, the Geneva-based subsidiary of Azerbaijan's state oil company SOCAR, has hired Kevin Hazell as head of its light-end oil trading desk, Reuters reported citing a source familiar with the matter.
Hazell began his new job in London last week, the source said.
He previously served as CEO of Reliance Global Energy Services, a subsidiary of India's Reliance Industries Ltd.
Prior to that he worked at Gazprom and BP.
SOCAR is the sole producer of petroleum products in Azerbaijan. The company also has filling stations in Azerbaijan, Georgia, Ukraine and Switzerland.
Minister: IAP - best way for Montenegro to get Azerbaijani gas
Ionian Adriatic Pipeline (IAP) is the best way for gas supply to Montenegro, Economy Minister of Montenegro Dragica Sekulic said in an interview with Trend.
Sekulic noted that the main activities in Montenegro related to the IAP implementation are the development of Preliminary Design of the Ionian Adriatic Gas Pipeline - Montenegro and Albania sections, with relevant Environmental and Social Impact Assessments and independent technical reviews (project funded by the Western Balkans Investment Framework), adoption of Special Purpose Spatial Plan for Coastal Region of Montenegro (with IAP route) and the development and adoption of secondary gas legislation.
The main activity of the Project Management Unit (PMU) for IAP in the coming period is the establishment of the project company, which will, as a legal entity take over the duties and activities from the PMU, which will in its current form probably take the role of the Steering Committee, added the minister.
Sekulic pointed out that the first step in that direction is the signing of the Letter of Intent on the Foundation of Ionian-Adriatic Pipeline Project Company by Albanian, Bosnia and Herzegovina, Croatian and Montenegrin natural gas transmission system operators (TSOs).
She recalled that ministries in charge for Energy of Montenegro, Albania, Bosnia and Herzegovina and Croatia signed the Memorandum of Understanding and together with the Transmission System Operators for gas (TSO) from each country established the Project Management Unit (PMU) for the IAP Project, devoted to defining further steps leading to the facilitation of development and implementation of the IAP Project.
PMU promotes the IAP project and uses every opportunity to present the importance and significance of IAP to the interested parties, decision makers within international community and potential partners/investors, added the minister.
Sekulic said that each country has two members in the PMU, one from the government and the other one from the TSO, with the Energy Community Secretariat and SOCAR as observers. "The Permanent Secretariat of the PMU is hosted by the Ministry of Economy of Montenegro."
"In addition to good cooperation we have in the field of tourism, energy cooperation between Montenegro and Azerbaijan is of strategic economic importance for us," said the economy minister. "Energy is one of the main pillars of development of Montenegro and in this field we've been implementing and we plan to implement several important strategic projects."
She noted that one of them is certainly the IAP project that, when it comes to natural gas, for Montenegro has the same importance as submarine power cable between Montenegro and Italy, when it comes to electricity.
"All our relevant documents and studies prove that the best way for Montenegro to be gas-supplied is through the Ionian-Adriatic Pipeline (IAP) and the valorization of its gas reserves from the Adriatic sea. IAP project will not only bring natural gas to Montenegro, but will link it with other countries of the region and enable natural gas, which is likely to be found in our offshore, be transported further to the Western Europe," said Sekulic.
As for the Southern Gas Corridor, Montenegrin minister noted that it is of great importance for the European energy security, as pointed out in numerous European Commission's and Energy Community's documents.
"Security of supply has been, for number of years now, the focus of European institutions, and diversification of sources of natural gas certainly one of the priorities. As for Montenegro, where natural gas infrastructure is currently not developed, it is estimated that Ionian-Adriatic Pipeline, an integral part of the Southern Gas Corridor, is the only reliable and viable source of natural gas and all our efforts and activities in this field are directed towards speedy development of this project," she added.
IAP is a proposed natural gas pipeline in Southeastern Europe (SEE) that will stretch from Albania through Montenegro, and Bosnia and Herzegovina, to Split in Croatia. It will be connected with the Trans Adriatic Pipeline (TAP). The capacity of the pipeline will amount to five billion cubic meters of gas per year.
Canadian company reveals volume of investments for boosting output at Azerbaijani oil & gas block
Canadian GLJ Petroleum Consultants company has calculated the amount of investments needed to move the reserves of Azerbaijan's Bahar-Gum Deniz block of oil and gas fields from the category of proven developed non-extractive to the category of proven developed extractive reserves in the next five years, a source in Azerbaijan's oil and gas market told Trend.
The source said that GLJ estimates the future development costs necessary to convert the proven undeveloped and developed non-recoverable reserves into extractive reserves at $262 million.
"It is necessary to make investments in drilling work on two territories with proven undeveloped reserves and re-completion of 49 wells at Bahar gas field, drilling on 10 territories with proven undeveloped reserves and re-completion of 21 wells in the Gum Deniz oil field, drilling two more producing and three water injection wells and re-completion of 17 production and four water injection wells at Gum Deniz", said the source.
GLJ consultants believe that the abovementioned activities will be carried out in the next five years, added the source.
The contract for exploration, rehabilitation, development and production at Bahar and Gum Deniz block of offshore fields was signed by Azerbaijan's state oil company SOCAR (20 percent) and Bahar Energy (80 percent) in 2009. Bahar field, developed since 1969, is located in 40 kilometers south-east from Baku.