Azerbaijan's petrochemicals industry will be boosted in 2016 with the opening of two new polymer plants, but they will be entering the market at a time of economic downturn for the country. Falling oil output and low crude prices are weighing heavily on domestic consumption, while external markets are not faring well either. However, there is optimism that long-term ambitions will help leverage the country's upstream resources to create a strong export-orient at ed petrochemicals industry from 2020.
The planned SOCAR Polimer polypropylene (PP) plant, with 200,000 tonnes per annum (tpa) capacity, at the Sumgayit Chemical Technology Park in Azerbaijan is scheduled to start production in H216. A 100,000tpa PE, the plant is also likely to come on stream at the same time. Beyond that, attention will shift to the massive world-class USD17bn Oil and Gas Processing and Petrochemical Complex (OGPC), which will improve efficiency and provide a wider range of higher value refined products.
SOCAR's OGPC will have total gas processing capacity of 10-12bn cubic metres (bcm) and oil refining capacity of 10mn tpa. Capacities will include 700,000 tpa high-density polyethylene (HDPE) and low-density polyethylene (LDPE), 550,000tpa PP, 40,000tpa benzene and 110,000tpa styrene.
Sanctions relief on Iran may offer Azerbaijan entry to the Iranian market for downstream and finished products with potential for petrochemicals investment. At the same time, Iran poses a direct threat to competition on the domestic market. This is unlikely to hold back the country's ambition to build world-scale plant, but until they are in commercial operation, the petrochemicals industry will remain small, dedicated to domestic consumption and operating at low levels of capacity utilisation.
A fertiliser project is planned in Karadagh with capacities of 255,000tpa ammonia and 500,000tpa urea. SOCAR also plans two fertiliser plants, each with capacity of 700,000tpa of urea: one in Azerbaijan and another in Georgia. Construction is due to be completed by end-2016. The objective is for Azerbaijan to raise its fertiliser exports to 1mn tpa.
Azerbaijan languishes in last place in BMI's proprietary Europe Petrochemicals Risk/Reward Index. This quarter, its score remains unchanged at 33.8 out of 100. This follows a period of declining scores as a result of worsening economic conditions caused by falling oil prices and the depreciation of the manat. BMI expects an improvement in the score during 2016 when a 200,000 tonnes per annum (tpa) polypropylene (PP) plant is expected to open, but this is unlikely to significantly improve the country's regional standing.
The Azerbaijan Petrochemicals Report has been researched at source, and features BMI Research's market assessment and independent forecasts for key petrochemicals sub-sectors. The report also analyses the impact of regulatory changes, recent developments and the background macroeconomic outlook and features competitive landscapes comparing companies by products and services, sales, market share, investments, projects, partners and expansion strategies.
BMI's Azerbaijan Petrochemicals Report provides industry professionals and strategists, sector analysts, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the Azerbaijani petrochemicals industry.
- Benchmark BMI's independent petrochemicals industry forecasts to test other views - a key input for successful budgetary and planning in the Azerbaijani petrochemicals market.
- Target business opportunities and risks in the Azerbaijani petrochemicals sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in Azerbaijan.
- Assess the activities, strategy and market position of your competitors, partners and clients via our Company Profiles (inc. KPIs and latest activity).
BMI Industry View
Summary of BMI’s key industry forecasts, views and trend analysis, covering the petrochemicals markets, regulatory changes, major investments, projects and company developments.
Industry SWOT Analysis
Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the petrochemicals sector and within the broader political, economic and business environment.
BMI Industry Forecasts
Historic data series (2009-2013) and forecasts to end-2019 for key industry and economic indicators, supported by explicit assumptions, plus analysis of key risks to the main forecasts. Indicators include:
- Energy: Oil production (‘000 b/d), oil consumption (‘000 b/d), net oil exports (‘000 b/d), gas production (bcm), gas consumption (bcm), net gas exports (bcm), oil refinery capacity (‘000 b/d).
- Petrochemicals: Ethylene capacity (‘000 tpa), ethylene production (‘000 tpa), ethylene consumption (‘000 tpa), polyethylene capacity (‘000 tpa), polypropylene capacity (‘000 tpa), polyvinyl chloride capacity (‘000 tpa), polyolefins consumption (‘000 tpa).
- Oil Products Prices: Price forecasts for all major oil-based products (USD/bbl) at major global energy trading hubs.
- Economic: Nominal GDP (USDbn), real GDP growth (%), GDP per capita (USD), population (mn), unemployment (%), exchange rate (against USD).
BMI’s Petrochemicals Risk Reward Index
BMI’s Risk Reward Indices provide investors (both corporate and financial) looking for opportunities in the region with a clear country-comparative assessment of a market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points to provide indices of highest to lowest appeal to investors, with each position explained.
Structure, size and value of the industry sector; overview of the industry landscape and key players; assessment of the business operating environment and the latest regulatory developments.
Industry Trends & Developments
Evaluation of company and sector-wide developments, including key projects (as well as expansion plans), latest company financial details and proposed international ventures.
Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI’s industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.
Global & Regional Market Overview
Analysis of the key trends driving the global industry, including worldwide output/capacity and demand analysis across ethylene, polyethylene, polyvinyl chloride, polystyrene, polyethylene terephthalate and polypropylene. The regional analysis looks at the implications of local and global trends on specific company activity.
Sub-sectors covered by the Petrochemicals Reports include:
Oil & Gas, Oil Refining, Olefins (ethylene, propylene), Polyolefins (polyethylene, polypropylene), Polyvinyl Chloride, Polystyrene
Please note – not all country Reports cover all sub-sectors – see website for details.
The Petrochemicals Market Reports are based on a network of primary sources, such as multilateral organisations (ACC, APLA, Cefi c, ICCA, ICMA), national chambers of commerce and industry, national statistical offi ces, government ministries and central banks, and multinational companies.
*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.