Socar Works on Garadagh Petchem Plant

Azerbaijan's state oil company Socar plans to commission a gas processing and petrochemical complex in Garadagh district in 2022 through its subsidiary Gas Plastics Company.

Including a steam cracking and a polymerisation facility it will turn 10bn m³/yr of gas into 600,000 metric tons (mt)/yr of polyethylene and 120,000 mt/yr of propylene. The propylene feedstock will be delivered to Socar Polymer Sumgait to make polypropylene. The plant will also produce 570,000 mt/yr of ethylene.

Development will take 15-18 months, while it studies engineering, procurement and construction; and financing, from a range of Asian and European banks. The construction will last 48 months assuming it goes ahead.

Financial consultants are ING Bank, China Development Bank and Gazprombank. Energy law specialists Vinson & Elkins are the legal consultants for Socar GPC, while local firm PSG also provides in-country counsel.

Over its lifetime (2022-2041) the project is expected to contribute $3.5bn to the state budget. It is noted that one of the advantages of the project is to increase the export potential by more than $1bn/yr which will have a positive impact on the national currency, the much-devalued manat (see picture).

Azerbaijan desk