Azerbaijan is one of the countries having enough resources and undertaking all necessary steps for the development of both the industrial and agricultural spheres of economic life. Development of chemical industry in Azerbaijan dates back to the mid-XXth century.
History
As such, the majority of chemical plants on the territory of Azerbaijan were built during that time period on the territory of Sumgayit city, one of which was the Super-Phosphate Plant as well. The major underpinning in the construction of the said plant was meeting domestic demands and demands of other Soviet republics in phosphate fertilisers. However, the collapse of the Soviet Union and resulting severance of technical and economic ties firstly led to significant fall and afterwards caused the absolute cessation of fertiliser production in Azerbaijan. As a consequence, fertiliser products imported from abroad have been widely used in the agricultural sector of Azerbaijan over the last few years.
As a result, certain measures had to be undertaken in order to reduce dependence on import of mineral fertilizers.
In order to develop agricultural sector, increase plant-growing, minimize dependency of the domestic food markets on import and provide population with food supplies, President Ilham Aliyev adopted an Order No 3004 dated August 25, 2008 approving the “State Programme on Reliable Food Supply of Population in the Republic of Azerbaijan for 2008-2015” which includes a large number of activities for the set targets. One of these measures was construction of nitrogen fertilizers – carbamide plant in the city of Sumgayit in line with contemporary international standards. That was specifically aimed at achievement of independence of the country from fertiliser imports and transformation of Azerbaijan into one of carbamide exporters in the region.
Another “State Programme for the Development of Industry for 2015-2020” approved by the relevant Order of the President of the Republic of Azerbaijan has reflected the year of 2017 as the operational start-up of the Carbamide Plant. Apart from the purposes of domestic supply, it is also anticipated to export certain part of the produced carbamide to Turkey through the Baku-Tbilisi-Kars railway which is currently under construction and into the world market through the Black Sea port – Kulevi Terminal, which belongs to SOCAR.
In the meantime construction of the fertilizer plant and implementation of the Project has been assigned to SOCAR in accordance with the Presidential Decree of 2011. Subsequently, in accordance with the Presidential Decree dated September 2011 the Carbamide Plant was established as a legal entity within the structure of SOCAR.
Call for Foreign Experience
Participation of President Ilham Aliyev in foundation stone laying ceremony on December 19, 2011 also indicates the strategic importance of the Project for Azerbaijan.
For the purposes of implementation of the construction project an international open tender was announced in August 2011. The Project was welcomed with great interest and seven foreign top-notch EPC companies, namely Hyundai E&C, Kawasaki Heavy Industries, Ltd., Samsung Engineering Co, Ltd., Technip Italy S.p.A., ThyssenKrupp Uhde GmbH, Toyo Engineering Corporation and partnership of Saipem S.p.A. and Technimont S.p.A., have duly participated therein. As a result, Samsung Engineering Co., Ltd. (South Korea) was announced winner of the held tender upon relevant decision of the Tender Committee dated December 14, 2012 and EPC Contract was signed between SOCAR and the said winner on March 13, 2013.
Next step of the Project implementation assumed execution of the relevant license agreements. As such, tripartite license agreements were signed in summer of 2013 between SOCAR, Samsung Engineering Co., Ltd. and Haldor Topsoe A/S (Denmark) and Stamicarbon B.V. (Netherlands) for the ammonia and carbamide production respectively.
Afterwards, an open tender for the selection of Project Management Consultancy Company for the provision of project management and third party inspection services was announced in the mid-2014. The major objective is to provide for successful outcome of the Project and reach sustainable operation of Carbamide plant by means of involving top companies with relevant experience in analogical fertiliser projects. As a result, Neste Jacobs Oy (Finland) was announced the tender winner and held negotiations with SOCAR on PMC Contract, which was signed in May 11, 2015 in Helsinki, Finland.
International practice shows that involvement of an experienced PMC company is quite significant for such kind of strategic projects. Meantime, that will facilitate SOCAR’s management and inspection process during engineering, especially detailed engineering, erection of procured equipment and materials and performance tests phases and, thus, call for efficient Project outcome.
Works on Project
Implementation
Coming to the Project implementation, it should be also mentioned that Basic Engineering was completed last year and that Detailed Engineering works will be completed later this year. Detailed Engineering works for this project cover preparation of HAZOP and HAZID, IFC, Plot Plan and 3D Model of the complex.
Moreover, engineering-geophysical survey on the territory of the plant has also been accomplished, along with construction of temporary facilities on the territory of the complex. Currently, preparation of infrastructure and supply with water and electrical energy is under progress.
Coming to the next Project stage, orders have already been placed for all long-lead and basic equipment items required for the complex.
With the purposes of supply of the Plant with specialised personnel in the future, first orders related to the required specialisations were placed to the Education-Training Centre of SOCAR. Moreover, relevant training courses will be organised in the future by licensors for the workers of the Plant. Besides, they will have an opportunity to pass an internship programme in one of the carbamide plants in foreign countries organised by SOCAR.
Coming to a more detailed idea of the plant itself, it should be noticed that it will consist of the ammonia, liquid and granulated carbamide production sections within the territory of 39.27 ha. The plant will be located on the territory of SOCAR, which was previously under the usage of Azerikimya PU and is located 35 km north-west from Baku.
Completion of construction works is planned by end of 2016-early 2017, whereas fully operational is expected to be several months later after completion of plant commissioning and start-up.
It is anticipated to have a daily production of 2000 tons (approx. 660,000 tons per year) of carbamide during the full capacity operations period. Natural gas, which will be purchased from Azeriqaz PU, is the main raw material for the carbamide production. Annual gas consumption required for the carbamide production will be of 435 mln m3 (1.32 mln m3/per day).
Carbamide is one of the best solutions for fertiliser use in agriculture given its physical characteristics, such as high solution in water and highest nitrogen content. Nearly 140 mln tons of carbamide is being produced annually, 90% of which is being used as fertiliser in the agricultural sector. Besides, carbamide may serve as good animal feed and raw material in manufacture of various chemicals, such as plastics, resin, glues and etc., and in the area of medicine.
In a nutshell, construction of the Carbamide Plant shall have positive impact and render a strong support to the sustainable development of agriculture in Azerbaijan. Moreover, provision of a large number of people with relevant work places on the Plant will have a positive impact on elimination of unemployment problem in the regions, specifically in Sumgayit.
