Local petroleum products claim for larger share

Petroleum products hold an important place in SOCAR's portfolio, since the state oil company carries out trade operations all over the world, Public Relations Head at Azerbaijan’s state oil company SOCAR Ibrahim Ahmadov told Trend.

"The import of petroleum products, for example, gasoline to Azerbaijan is usually more expensive than domestic production. This is due to the fact that the international market prices for main types of fuel used in Azerbaijan are much higher than the sales prices in the country, even excluding customs and transportation costs," he said.

Ahmadov stressed that local products meet around 95 percent of the domestic demand and this tendency will continue in the future as well.

The share of local petroleum products in the country’s energy balance may increase after completing the modernization of Baku Refinery, he noted.

Ahmadov added that the products of Baku Refinery, or the products that are not in high demand in the country, for example, Premium and Super gasoline (95 and 98) are exception.

"Depending on the demand level, in certain periods, the import of small volumes of products that are not in high demand may be more profitable and commercially more efficient than producing the same product in the country, since the level of product profitability is often proportional to demand and production volumes," public relations head said.

Ahmadov noted that SOCAR has not imported fuel oil to Azerbaijan this year.

He pointed out that the import of petroleum products to Azerbaijan in 2018 is limited to certain volumes of jet fuel (in addition to the produced volumes) to meet the growing demand of local airlines, as well as highoctane gasoline (Premium and Super) and A-92 gasoline only during the period of repair work at the refinery.

Heydar Aliyev Oil Refinery was established in July 1953 as New Baku Oil Refinery. The combined atmospheric vacuum plant is the major plant at the refinery and has a capacity of 6Mt of crude oil.

The refinery was installed with major equipment including ED-AV-6 unit (1976), a catalytic reforming unit (1980), a gradual coking unit (1986), and a catalytic cracker (1993).

According to SOCAR Presidential decree dated December 24, 2014, the activity of "Azerneftyag" oil refinery was suspended on January 1, 2015, for joining the Heydar Aliyev Baku Oil Refinery.

A diesel hydrotreating reactor, manufactured by the Indian company Larsen & Toubro, has been delivered as part of the project to modernize the Heydar Aliyev Baku Oil Refinery, SOCAR said on November 15, 2018.

Installation of the reactor is planned in the near future. Its length is 32.7 meters, width is 8.4 meters, and height is 6.6 meters. The manufacture of the reactor began in July 2017 and lasted 14 months.

As noted, the refinery also began installing two thermoreactors from AMD International SRL and six heat exchangers from Daekyung Machinery & Engineering Co.

Currently, Baku Refinery is undergoing modernization, which will be completed in 2021. Following the modernization, the refinery’s capacity will increase from 6 million tons per year to 8 million tons per year, while its operational term will be extended until 2040.

The cost of modernization of the Heydar Aliyev Oil Refinery is estimated at around $2.2 billion.

In 2010, the refinery produced 43,000 tons of A-98 gasoline, 1,185,700 tons of A-92 gasoline, 19,700 tons of A-80 gasoline, 600,400 tons of kerosene, 2,420,300 tons of diesel fuel, 214,000 tons of liquid gas, 267,500 tons of coke, and 220,600 tons of furnace oil.