- Language: English
- Published: August 2012
Azerbaijan Petrochemicals Report Q2 2012
- Published: February 2012
- Region: Azerbaijan
- 45 Pages
- Business Monitor International
Business Monitor International's Azerbaijan Petrochemicals Report provides industry professionals and strategists, corporate analysts, petrochemical associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Azerbaijan's petrochemicals industry.
In 2011, petrochemicals and downstream industries reported stellar growth as the industry enjoyed an influx of fresh investment and strong demand. In the first 10 months of 2011, Azerbaijan’s industrial output declined 4% year-on-year (y-o-y) in value terms, with private sector industry output declining 7.9% y-o-y. The decline was largely related to the extractive industries; oil output declined 8.9% and gas was down 2.5%, but non-oil industrial growth was 9.8%. The chemicals industry was one of the strongest non-oil industrial segments, with 36% growth, while rubber and plastic output rose 24.5%.
The non-energy sectors of the economy will be crucial in rebalancing the country’s economy and generating growth in household spending. The economy is largely driven by the oil industry, and nearzero economic growth in 2011 indicated a strong contraction in the sector. The non-oil economy posted 9.5% growth in 2011. Recession in the eurozone would also put pressure on Azerbaijan’s oil exports, with a likely knock-on effect on the more domestically oriented non-oil sector. In the short term, Azerbaijan’s growth outlook will most likely be affected by a decline in output and investment in the energy sector, which accounts for more than half the economy. We believe the government will therefore be focused on boosting the industrial sector, with the petrochemicals industry likely to take the lead in adding value to domestic natural resources. This will help accelerate economic growth to a forecast 5%-6% from 2013.
The expansion of the petrochemicals sector in 2012 will very likely focus on Azerbaijani methanol producer AzMeCo, which us planning to export about 90% of its output when it completes its US$360mn plant in Q212. The plant will have a capacity of 560,000 tonnes per annum (tpa), raising methanol production in Azerbaijan to 720,000tpa. The remainder for domestic use will be used by manufacturing to bolster domestic non-oil industry, such as the production of acetic acid (165,000tpa), formaldehyde (18,000tpa) and melamine (15,000tpa). A fertiliser project is also planned at AzMeCo’s Karadagh, with capacity of 255,000tpa ammonia and 500,000tpa urea.
Progress is under way in establishing a world-scale petrochemicals complex in Azerbaijan. The State Oil Company of Azerbaijan (SOCAR) aims to begin construction of the gas-processing and petrochemical complex in the Garadag district of Baku in 2013, and it should be completed in 2018-20. The complex is set to include a gas-processing facility with capacity for 10bn cubic metres (bcm), a 10mn tpa oil refinery, and a petrochemical complex with capacities of 700,000tpa high density polyethylene and low density polyethylene, 130,000tpa polypropylene, 40,000tpa benzene and 110,000tpa of styrene. The new complex could be integrated into the existing Azerkimya complex, which has been operating at less than 20% capacity over the past decade.
Azerbaijan is in 10th and last place in BMI’s proprietary Central And Eastern Europe Petrochemicals Business Environment Ratings, with a score of 32.3, down 0.9 points since the previous quarter owing to a decline in its country risk score. Azerbaijan is 7.0 points behind Bulgaria in the regional ranking. We believe the overall score could improve 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’s considerable energy reserves and rising gas output have not helped to improve the country’s petrochemicals capacity, largely owing to the poor business environment which has deterred investors. However, there are signs that this is changing for the better as the government makes a concerted effort at restructuring the sector. SHOW LESS READ MORE >
Azerbaijan Petrochemicals Industry SWOT
Global Petrochemicals Overview
Petrochemicals Market Overview
Table: World Ethylene Production By Country, 2011 And 2016 (‘000 tonnes capacity)
Table: Financial Results Of Major Petrochemicals Companies, 2010
European Petrochemicals Overview
Table: Azerbaijan’s Petrochemicals Sector – Cracker Capacity Data And Forecasts, 2008-2016 (‘000 tpa)
Table: Manufacture Of Petrochemicals Products, 2000-2010 (‘000 tonnes)
Industry Trends And Developments
Petrochemicals Business Environment Ratings
Table: Central And Eastern Europe Petrochemicals Business Environment Ratings
Industry Forecast Scenario
Table: Azerbaijan’s Petrochemicals Sector, 2008-2016 (‘000tpa, unless otherwise stated)
Table: Economic Activity
State Oil Company of Azerbaijan (SOCAR)
Glossary Of Terms
Table: Glossary Of Petrochemicals Terms
How We Generate Our Industry Forecasts
Chemicals And Petrochemicals Industry
Business Environment Ratings
Table: Petrochemicals Business Environment Indicators And Rationale
Table: Weighting Of Indicators
- State Oil Company of Azerbaijan (SOCAR)
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