Azeri Petchem Sector to Triple Gas Use in 2019
Azerbaijan’s natural gas deliveries to its petrochemical sector could almost triple next year.
The country has just two petrochemical plants that are major gas consumers, both owned by state oil and gas producer Socar, which together may consume 1.1bn m3/yr in 2019.
The first, Socar Methanol, is expected to almost double its gas offtake from 0.3bn m3 this year (similar to 2017) to 0.52bn m3 in 2019.
The other, Socar Carbamide, will open for the first time in early 2019 and start making urea, needed for fertiliser, and is expected to require 0.5bn to 0.6bn m3/yr gas.
Socar Methanol CEO Elnur Mustafayev told NGW December 20 that plant may eventually need 0.73bn m3/yr in the 2020s, once it achieves full methanol manufacturing capacity of 650mn metric tons/yr. In 2019, it is expected to run at 71% of that capacity, up from around 40% lately.
Gas is currently exported at below $250/’000 m3 but using it to make methanol can double its value. All but 3% of output is exported. About 85% of the plant’s exports went to Turkey and EU markets, where the current market price of methanol is about $480/mt. Moreover, Mustafayev says that a new unit at the plant to produce high-grade (HPLC) methanol will open next year. The plant opened in 2013 but owner AzMeCo went bankrupt so the plant was sold in 2016 to Socar.
Azerbaijan is developing Absheron and Umid gas fields with foreign partners to add between 2.5bn and 3 bn m3/yr gas to domestic supply by 2021. The country expects to increase exports to 9.5 bn m3/yr over the same period, up 7.5%/year, due to a gradual rise in gas output from Shah Deniz stage 2 that started mid-2018.
Currently Azerbaijan consumes 11bn m3/yr on its domestic market, of which about half is in power generation, 30% used in homes, and the rest by industry.
Update 2.20pm: Socar Turkey and BP said Dec.20 they signed a heads of agreement (HoA) to evaluate the creation of a joint venture that would build and operate a world-scale petrochemicals complex at Aliaga, western Turkey to produce 1.25mn mt/yr of purified terephthalic acid (PTA), 840,000 mt/yr paraxylene and 340,000 mt/yr benzene; natural gas is not expected to be the feedstock. They aim for a final investment decision in 2019 which could result in the complex's start up in 2023.