SOCAR continues modernization of Heydar Aliyev Oil Refinery

3 November 2016 13:28 (UTC+04:00)

By Nigar Abbasova

The modernization of the Heydar Aliyev Oil Refinery, which owned and operated by Azerbaijan’s energy giant SOCAR, is currently underway.

SOCAR Vice-President for Strategic Development Tofig Gahramanov said that the implementation of maintenance operations at the refinery will require more expenses than the company initially planned.

The cost of modernization program currently amounts to nearly $1.5-$1.7 billion, while previously the cost was estimated at about $1.3 billion.

The operation of the plant, which is focused on the production of light petroleum products, was suspended for a month in August 2016. The company held an assessment of the refinery with the involvement of foreign experts.

“In the end it turned out that it’s necessary to do more things than it was planned at first, and this will require a bigger volume of investments,” Gahramanov clarified.

He added that some $80 million have been invested in the project so far.

The maintenance operations at the Heydar Aliyev Oil Refinery are implemented within the modernization plan, which is expected to be completed by 2020. By that time, producing capacity of the refinery is expected to increase from 6 million up to 7.5 million tons per year.

Gahramanov went on saying that implementation of EPC project (Engineering, Procurement, Construction), which symbolizes the start of construction work at the territory of the refinery will be launched in March 2017, adding that FEED project (Front End Engineering Design) on the installation of new facilities will be completed by December 2016.  

He added that two tenders are planned to be held within the launch of construction work at the site. The first tender is expected to be held in January, while the second is scheduled for April 2017.   

The first tender will define the company, which will be engaged in the construction of new facilities, while the second will identify the contractor for the modernization of existing facilities.

Gahramanov said that the facilities on the production of Euro 5 diesel will be operational in 2020, while the production will be launched a half year later.  

The refinery is processing 21 out of 24 grades of Azerbaijani crude and 15 different petroleum products, including automotive gasoline, aviation kerosene, diesel fuel, black oil, and petroleum coke. The plant completely meets the entire demand for petroleum products in the country, while 45 percent of its petroleum products are exported.

SOCAR announced the liquidation of Azerneftyag Oil Refinery in January 2015, to merge it with the Heydar Aliyev refinery. The decision for the reconstruction and modernization of the refinery was taken in October 2015.

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Nigar Abbasova is AzerNews’ staff journalist, follow her on Twitter: @nigyar_abbasova

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