Business Monitor International


Azerbaijan Petrochemicals Report

Published 11 February 2014

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Azerbaijan Petrochemicals Report

Azerbaijan continues to progress with plans to build a refinery and petrochemicals complex to add value to the country's considerable energy reserves and rising gas output. While the complex is planned for completion in 2017/18, BMI's latest Azerbaijan Petrochemicals Report believes the expansion, which promises to transform the country into a significant net exporter of polymers, is unlikely to come onstream in the next five years due to continued delays in the project.

Already, the past year has seen Azerbaijan Methanol Company (AzMeCo) begin operations at its new US$360mn plant. The plant has a capacity of 560,000 tonnes per annum (tpa), raising methanol production in Azerbaijan to 720,000tpa. About 90% of the output is set to be exported.

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

  • The government of Azerbaijan also plans to increase polyethylene production from 72,200tpa in 2011 to 120,600tpa in 2015. The country is also set to start production of polypropylene (PP) 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 realised.

  • The medium-term focus will be SOCAR's Oil-Gas Processing and Petrochemical Complex (OGPC), which will have total gas processing capacity of 10-12bn cubic metres (bcm) and oil refining capacity of 10mn tonnes per annum (tpa). The complex is now scheduled to come fully on-stream in 2017/18, although BMI is sceptical about the pace of growth and has not included the project in the forecasts. Construction is now due to begin in 2014, having been delayed from mid-2013 in initial announcements. Capacities will include 700,000 tonnes per annum (tpa) high-density polyethylene (HDPE) and low-density polyethylene (LDPE), 550,000tpa polypropylene (PP), 40,000tpa benzene and 110,000tpa styrene.

  • Azerbaijan is in 16th and last place in BMI's proprietary Europe Risk/Reward Ratings (RRRs), with a score of 35.4 points, up 0.1 point...

Table of Contents

BMI Industry View
7
SWOT
8
Industry Forecast
10
Table: Petrochemicals Sector, 2010-2018
11
Industry Risk/Reward Ratings
13
Europe Petrochemicals Risk Reward Ratings
13
Table: European Petrochemicals Risk/Reward Ratings (Scores Out Of 100)
17
Azerbaijan Petrochemicals Risk/Reward Ratings
18
Market Overview
20
Table: Cracker Capacity Data & Forecasts, 2009-2017 ('000 tpa)
20
Industry Trends And Developments
22
Upstream
23
Company Profile
25
Azerkimya
25
State Oil Company Of Azerbaijan (SOCAR)
27
Regional Overview
30
Europe Overview
30
Declining Capacities
31
Table: European Cracker Capacities, 2013
37
Global Industry Overview
41
A Stable 2013, Leading To Growth In 2014-
41
Table: Top 10 Ethylene Producers, 2013
43
Long-Term Growth
43
Shale: The Future Of Feedstock-
45
Threats To growth
48
Global Oil Products Price Outlook
48
Table: 2013 Oil Product Price Forecast Record
48
Methodology
51
Crude Price Forecasts
52
Table: BMI's Oil Price Forecasts, Average Price (US$/bbl)
52
Oil Product Price Forecasts
52
Table: BMI's Refined Products Forecast, US$/bbl
53
Narrower US Market Crude-Product Spreads
54
Weak Demand Persists
55
Supply: Global Capacity Supports Demand
56
Quarterly Prices
60
Table: BMI Refined Oil Products Quarterly Forecast, US$/bbl
60
Naphtha: Long-Term Growth Faces Headwinds From Gas
61
Gasoline And Gasoil/Diesel: Gasoline Weakness To Continue
63
Jet Fuel: Downward Movement Capped By Recovery
69
Table: Total Air Freight And Passenger Volumes
71
Bunker Fuels: Sulphur Control To Hit Rotterdam Hardest
71
Risks To Outlook
73
Demographic Forecast
74
Table: Azerbaijan's Population By Age Group, 1990-2020 ('000)
75
Table: Azerbaijan's Population By Age Group, 1990-2020 (% of total)
76
Table: Azerbaijan's Key Population Ratios, 1990-2020
77
Table: Azerbaijan's Rural And Urban Population, 1990-2020
77
Glossary
78
Table: Glossary Of Petrochemicals Terms
78
Methodology
79
Industry Forecast Methodology
79
Risk/Reward Ratings Methodology
81
Table: Petrochemicals Risk/Reward Rating Indicators
82
Table: Weighting Of Indicators
83

The Azerbaijan Petrochemicals Report has been researched at source, and features Business Monitor International (BMI)'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.

Key Benefits

  • 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).

Coverage

BMI Industry View

Summary of BMI's key industry forecasts, views and trend analysis, covering petrochemicals markets, regulatory changes, major investments, projects and company developments.

Market Overview

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.

Business Environment Ratings

BMI's Petrochemicals Business Environment Ratings provide a country-comparative Risk-Reward Ratings index aimed at investors (both corporate and financial) in the regional petrochemicals market.

The ratings methodology makes sophisticated use of over 40 industry, economic and demographic data points and is part of BMI's integrated Country Risk-Industry Ratings products.

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.

BMI Industry Forecasts

Historic data series (2009-2012) and forecasts to end-2018 for all 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 (US$/bbl) at major global energy trading hubs.

Economic: Nominal GDP (US$bn), real GDP growth (%), GDP per capita (US$), population (mn), unemployment (%), exchange rate (against US$).

Company Profiles

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.

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Testimonials

'An essential, multi-faceted research tool. BMI’s thorough understanding of the major market players enables an informed – and informative – review of the sector’s actual performance, together with useful insights into current industry issues, which are topped-off with detailed and invaluable forecasts of industry and macroeconomic trends.’

Senior Research Analyst, ABC International Bank plc