Azerbaijan to invest $1.2bn for upgrading two of its oil refineries

State Oil Company of Azerbaijan (SOCAR) intends to invest $1.2bn for reconstruction and upgrade of its oil refineries named after Heydar Aliyev and Azerkimya PU.

SOCAR Strategic Development vice president Tofig Gahramanov was cited by the Azeri-Press Agency (APA) as saying: "Recently, we have received concrete proposals from several companies on participation as investor-partner.

"Taking into these proposals, we are negotiating with potential partners. If these negotiations end successfully, the next stages of the projects will be implemented with the investor-partner company".

Expenses for the projects will be paid by the government.

Gahramanov said: "Economic profitability of reconstruction and modernisation works in the Oil Refinery named after Heydar Aliyev is high.

"After these works, it’s expected to get $700m per year".

Besides improving the quality of the produced gasoline in the country, the planned upgrades are expected to increase its volume to 2.2 million tonnes from current 1.3 million tonnes.

The reconstruction projects are also likely to boost the country’s capacity for diesel generation from 2.3 million tonnes to 2.9 million tonnes and that of kerosene from 700,000 tonnes to one million tonnes.

The expected outputs are likely to meet the country’s fuel demands at least till 2020.

Gahramanov was quoted by APA as saying: "75% of gasoline to be produced after these works will be directed to domestic need, 25% to export, 60% of diesel to domestic need, 40% to export".

Upgrades at the Azerkimya unit are likely to increase ethylene and propylene production in the country to 290,000 tonnes from 160,000 tonnes at present.

Project works for the facilities will be conducted in stages, with completion of the initial stage planned in 2018. SOCAR expects the works under the second stage to be over in 2019.