Baku Energy Forum - Azerbaijan’s carbamide plant built by 94.8%

Azerbaijan’s carbamide plant built by 94.8%


Construction of the carbamide plant of Azerbaijan’s state oil company SOCAR has been completed by 94.8 percent, the plant’s director Khayal Jafarov said.

He made the remarks during ‘The 2nd SOCAR International Caspian and Central Asia Downstream Forum – Trading, Logistics, Refining, Petrochemicals’, held in Baku Apr. 27.

He said that engineering work and procurement of equipment have been completed by 100 percent, construction work - by 82 percent, civil engineering work - by 93 percent, installation of equipment - by 70 percent.

Jafarov added that it is planned to complete all work and start adjustment and commissioning of the plant by the end of 2017.

He noted that the plant will produce 650,000-660,000 tons of carbamide per year.

It is planned to supply a quarter of production, that is, 150,000-200,000 tons of carbamide, to the Azerbaijani domestic market, he said, adding that the remaining part will be exported to Turkey, Georgia and the markets of the Black Sea and the Mediterranean Sea countries.

However, Turkey will be the main market for the products’ export, he noted. According to market research, currently, Turkey imports about 1.5 million tons of carbamide, he said. By 2020, the imports are expected to grow to 1.8 million tons, Jafarov noted.

After the Baku-Tbilisi-Kars railway is launched by the end of 2017, it will be possible to supply carbamide to Turkey quickly and inexpensively, Jafarov said.

Jafarov recalled that South Korea’s Samsung Engineering won the tender for the construction of the carbamide plant. The net cost of the project for the construction of production capacities will be about 498 million euros, he noted.

“South Korea’s Samsung Engineering acts as a general contractor of the plant’s construction, but it has no license for production of carbamide and ammonia, which will be by-product in the carbamide production process,” he said. “Therefore, the relevant licensing agreements were signed with Haldor Topsoe company (Denmark) for production of ammonia and Stamicarbon B.V. company (the Netherlands) for production of carbamide.”

Production at the plant will be environmentally friendly, that is, no pollutant emissions into the atmosphere are expected, the plant’s director said.

The plant will have an autonomous electricity system, he noted, adding that the plant will consume 25-26 MW of electricity per hour.

“This is more than some small towns consume,” Jafarov said. “Construction of infrastructure to provide the plant with gas and industrial water and connect the plant to electricity networks, as well as to provide the plant with electricity in emergency situations, will be finished in June and July of 2017.”

At first, financing of construction work was carried out from the Azerbaijani state budget and about 205 million manats were allocated from there before the beginning of 2015, but later it was decided to switch to project finance and negotiations with banks were started, Jafarov added.

“As a result, the Export–Import Bank of South Korea (EximBank) opened a line of credit worth 500 million euros under Azerbaijan’s state guarantee to complete the construction of the plant,” he noted. “EximBank will directly provide 251 million euros, while 249 million euros will be allocated by three commercial banks (Italy’s UniCredit S.p.A., France’s Societe Generale S.A. and Germany’s Deutsche Bank AG) with the support of EximBank.”