Azerneftyag refinery to be demolished in 2018

12 May 2016 17:01 (UTC+04:00)

By Fatma Babayeva

Azerneftyag oil refinery will be demolished after the commissioning of the new bitumen unit at the Baku Oil Refinery named after Haydar Aliyev in the summer of 2018.

The statement was made by Tofig Gahramanov, vice-president for strategic development at Azerbaijan’s state energy company SOCAR on May 11.

Currently, two small units for primary oil processing and a bitumen unit with a capacity of 250,000 tons per year operate at the refinery, said Gahramanov, adding that due to the demand of bitumen within the country, the plant will function until the summer of 2018, when a new bitumen plant with a capacity of 400,000 tons per year will be commissioned at the Baku Oil Refinery.

In January 2015, SOCAR announced the liquidation of Azneftyag oil refinery and its merger with Baku Oil Refinery. The decision was made as part of the company’s overall plan to improve corporate structure and optimize business processes through consolidating its refineries under an integrated management scheme.

The move is intended to eliminate economically inefficient production activities associated with operations in two separate refineries.

The company decided to rebuild the refinery so that it will continue to function for another 15 years. The plant is expected to undergo a large-scale renovation process including the construction of new plants which will increase the capacity and quality of the production.

The modernization of Baku Oil Refinery will be finalized by the end of 2020.

Upon completion of the modernization works, the processing capacity of the refinery will reach from 6 million to 7.5 million tons of oil a year.

A number of facilities will be built in order to ensure the production of diesel fuel in Azerbaijan which meets Euro 5 standards by July of 2019. In addition, several units will also be constructed for the production of gasoline that meets Euro 5 standards by May 2020.

Moreover, the preparation for the front end engineering and design (FEED) project will be accomplished by the end of 2016, and a new asphalt plant will be commissioned in July 2018.

Another strategically important project realized by SOCAR - the Oil and Gas Processing Complex (OGPC) will be constructed in about 60 kilometers of Baku.

The OGPC which is expected to finalize by late 2022 or early 2023 has multiple interfaces not only between process units, utilities, and offsite facilities, but also between the new gas processing and petrochemical facilities. The cost of the project amounts to $17.1 billion plus interests for allocated loans.

The modernization project of the refineries will enable Azerbaijan to meet its domestic demand for motor gasoline in the next 15-20 years.

The project will allow SOCAR to ensure the withdrawal of harmful production outside of Baku. Moreover, the formation of the new and modern production facilities will minimize the amount of emitted harmful toxins, as well as, to bring country's production up to the levels meeting the highest international quality standards and to expand export capacity.

The mobilization of existing internal resources and the creation of new oil refineries will allow local consumers to solve the problem of automobile fuel supplies in a comprehensive and beneficial way.

In accordance with the statistics, 5.45 million tons of oil products were produced in Azerbaijan during 2015 compared to 5.31 million tons of oil products manufactured during 2014.

In addition, 1.45 million tons of oil products were produced during the first quarter of 2016 compared to 1.34 million tons of oil products produced during the respective period of 2015.

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Fatma Babayeva is AzerNews’ staff journalist, follow her on Twitter: @Fatma_Babayeva

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