Azerbaijan Petrochemicals Report Q4 2012

The latest Azerbaijan Petrochemicals Report reflects our expectations for long-term growth in capacities,
but cautions that plans remain vague and there is no firm confirmation on proposed projects and potential
partners.

The report examines the country’s strengths and weaknesses and assesses potential growth areas over the
medium term. It also looks at government policy, which is focusing intensively on developing the non-oil
sector.

Over the medium term, the expansion of the petrochemicals sector will focus on Azerbaijani methanol
producer Azerbaijan Methanol Company (AzMeCo), which is planning to export about 90% of its
output when it completes its US$360mn plant in Q113. The plant will have a capacity of 560,000 tonnes
per annum (tpa), raising methanol production in Azerbaijan to 720,000tpa. The remainder, planned for
domestic use, will be used by manufacturing firms to bolster the domestic non-oil industry. This includes
the production of acetic acid (165,000tpa), formaldehyde (18,000tpa) and melamine (15,000tpa). A
fertiliser project is planned at AzMeCo’s Karadagh, with capacities of 255,000tpa ammonia and
500,000tpa urea. The State Oil Company of Azerbaijan Republic (Socar) is also planning two fertiliser
plants with 700,000tpa of urea capacity each, one in Azerbaijan and one in Georgia, with construction due
to begin in mid-2013 and completed by end-2016. The objective is for Azerbaijan to raise its fertiliser
exports to 1mn tpa.

Over the last quarter, BMI has revised the following forecasts/views:

• Socar announced in April 2012 that it planned to start construction of a new oil refinery, a gas
  liquefaction plant and a chemical plant in Q113. The US$14bn project, which is expected to be
  completed by 2020, shares many similarities with a previously announced project at Sangachal,
  although with smaller capacities. This could suggest that the original project has been scaled
  back.
• The government of Azerbaijan plans to increase polyethylene production from 72,200 tonnes in
  2011 to 120,600 tonnes in 2015. The country is also set to start production of polypropylene in
  2014, with 58,300 tonnes produced in the first year of operations and 61,800 tonnes in 2015.
  BMI believes these targets are likely to be met.
• Azerbaijan is in 10th and last place in BMI’s proprietary Central and Eastern Europe
  Petrochemicals Risk/Reward Ratings, with a score of 34.7, up 2.0 points since the previous
  quarter owing to an improvement in its country risk score. Azerbaijan is 4.6 points behind
  Bulgaria. Azerbaijan’s score could rise if plans for a new integrated petrochemicals complex
  come to fruition, but this is unlikely to come on stream before 2018, at the earliest

Azerbaijan Petrochemicals Industry 2012

Published: August 2012               No. of Pages: 51                    Price: US $ 1175

 

Table of Contents
BMI Industry View 5
SWOT Analysis 6
Azerbaijan Petrochemicals Industry SWOT . 6
Global Petrochemicals Overview 7
Petrochemicals Market Overview . 7
Table: World Ethylene Production By Country, 2011 And 2016 (‘000 tonnes capacity) 7
Financial Results 11
Table: Financial Results – Major Petrochemicals Companies, 2011 11
Global Oil Products Price Outlook 12
Table: BMI Oil Price Forecasts, 2011-2016 . 12
Europe Market Overview 19
Azerbaijan Market Overview . 23
Table: Cracker Capacity Data & Forecasts, 2008-2016 (‘000 tpa) 23
Table: Manufacture Of Petrochemicals Products, 2000-2010 (‘000 tonnes) . 24
Industry Trends And Developments 25
Upstream Activities . 26
Petkim Privatisation 28
Industry Forecast Scenario 31
Table: Petrochemicals Sector, 2008-2016 (‘000tpa, unless otherwise stated) . 31
Petrochemicals Risk/Reward Ratings 34
Azerbaijan Risk/Reward Ratings . 34
Table: Central And Eastern Europe Petrochemicals Business Environment Ratings 34
Macroeconomic Forecast 37
Another Year Of Lacklustre Growth Possible . 37
Table: Azerbaijan – Economic Activity . 38
Company Profiles 39
Azerkimya 39
State Oil Company Of Azerbaijan (Socar) . 40
Country Snapshot: Azerbaijan Demographic Data . 42
Section 1: Population . 42
Table: Demographic Indicators, 2005-2030 . 42
Table: Rural/Urban Breakdown, 2005-2030 . 43
Section 2: Education And Healthcare . 43
Table: Education 43
Table: Vital Statistics . 43
Section 3: Labour Market And Spending Power 44
Table: Employment Indicators 44
Table: Consumer Expenditure, 1999-2004 (US$) 44
Table: Average Annual Wages, 2000-2012 45
Azerbaijan Petrochemicals Report Q4 2012
© Business Monitor International Ltd Page 4
BMI Methodology . 46
How We Generate Our Industry Forecasts 46
Chemicals And Petrochemicals Industry 46
Cross Checks . 47
Business Environment Ratings 48
Table: Petrochemicals Business Environment Indicators And Rationale . 48
Weighting . 49
Table: Weighting Of Indicators. 49
Glossary Of Terms . 50
Table: Glossary Of Petrochemicals Terms 50Table: World Ethylene Production By Country And (‘ tonnes capacity)
Table: Financial Results – Major Petrochemicals Companies
Table: BMI Oil Price Forecasts
Table: Cracker Capacity Data & Forecasts (‘ tpa)
Table: Manufacture Of Petrochemicals Products (‘ tonnes)
Table: Petrochemicals Sector (‘tpa unless otherwise stated)
Table: Central And Eastern Europe Petrochemicals Business Environment Ratings
Table: Azerbaijan – Economic Activity
Table: Demographic Indicators
Table: Rural/Urban Breakdown
Table: Education
Table: Vital Statistics
Table: Employment Indicators
Table: Consumer Expenditure (US$)
Table: Average Annual Wages
Table: Petrochemicals Business Environment Indicators And Rationale
Table: Weighting Of Indicators
Table: Glossary Of Petrochemicals Terms