News Archive

16 January 2019

SOCAR’s carbamide plant starts operation

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• Production at the SOCAR’s carbamide plant will eliminate the need for imports of nitrogen fertilizers, thereby reducing the country’s expenditures in foreign currency

• The plant has a production capacity of 650-660 thousand tons per year

• Production of high-nitrogen carbamide fertilizer will make a significant contribution to the development of agriculture in Azerbaijan

• 70 percent of the production is intended for export, which will boost the country’s income annually by up to $160 On January 16, 2019 SOCAR put its carbamide plant in Sumgayit into operation. The opening ceremony was attended by the President of the Republic of Azerbaijan Ilham Aliyev, SOCAR top officials and representatives of the companies involved in the construction of the plant.

The head of state was informed that SOCAR has taken the course of extending the oil and gas chemical industry in recent years to ensure the stability of operations and reducing the dependency on one type of commodity. The carbamide plant has been planned as a constituent in SOCAR’s greater value chain. The plant has a production capacity of 650-660 thousand tons of carbamide products per year using 435 million cubic meters of natural gas as a raw material.

Carbamide is a compound containing high levels of nitrogen and is considered as one of the best fertilizers, also because of its quick solubility in water. It is produced by the synthesis of ammonia and carbon dioxide. There is a high demand for this fertilizer due to its low production costs, economical transportation, convenient application and high productivity in agriculture. Carbamide is widely used in the production of other chemicals and pharmaceuticals also.

Whereas the nitrogen fertilizers were imported to Azerbaijan previously, the new plant will fully meet the domestic market’s needs, with additional export amounting to about 70% of the plant’s output. As a result, the country will save approximately $90 million of annual import expenditures, whilst the export of fertilizers will become an additional source of income for Azerbaijan.

While reporting to the head of state, SOCAR President Rovnag Abdullayev said: '' In total more than 3,600 people have been involved in the construction of the plant. Currently 500 people have been permanently employed for the operation phase. SOCAR’s corporate training and scholarship programs were particularly helpful in preparing the properly qualified workforce. More than 18 million man-hours of construction work were carried out safely, indicating high safety standards applied in the course of the project.”

The carbamide plant of SOCAR is currently the largest project of the non-oil sector in the country, with a total cost of about €800 million. The project was initially funded from the state budget. On January 27, 2017, a state guaranteed loan of €500 million was taken from the South Korean Export-Import Bank (KEXIM), as well as Societe Generale (France), Deutsche Bank (Germany) and UniCredit (Austria). The long-term financial injection taken through the support of partner banks has reduced the state budget’s burden. Also, SOCAR has contributed about €100 million to cover taxes and duties, as well as other expenses related to the project.

The foundation of the carbamide plant was laid in 2011 in a ceremony attended by the President of the Republic of Azerbaijan Ilham Aliyev. The plant was constructed by South Korea’s Samsung Engineering Co., Ltd implementing technologies introduced by Denmark’s Haldor Topsoe and Stamicarbon B.V of the Netherlands. Neste Engineering Solutions Oy of Finland has provided project management consultation and independent inspection services.