Azerbaijan to use BTK for urea export
Trend | May 4, 2018- Azerbaijan state company SOCAR plans to use the Baku-Tbilisi - Kars railway for urea supplies to Georgia and Turkey, director of the carbamide plant Khayal Jafarov said.
He said, SOCAR is not afraid of high competition in the urea market, despite the construction of factories in Russia and Turkmenistan.
"Our main market is Turkey. We studied it and found out that the main deliveries of urea to Turkey come from Egypt and partly from Russia. However, we have such advantage as logistics. In addition, after 2020, the demand for urea will grow everywhere", - said Jafarov.
He noted that the recently launched BTK railway will make it possible to quickly deliver goods from Azerbaijan to Georgia and Turkey.
"Given the logistics, we will be very competitive with the use of BTK," said Jafarov.
SOCAR’s urea factory will produce 1,200 tons of ammonia and, subsequently, 2,000 tons of urea per day. It is planned to supply a quarter of production, that is, 150,000 tons of urea (with a potential growth of up to 200,000 tons, or 30 percent of production) to the Azerbaijani domestic market. The remaining part will be exported.
South Korea’s Samsung Engineering won the tender for the construction of the urea factory. Samsung Engineering acts as a general contractor of the factory’s construction, but it has no license for production of urea and ammonia, which will be by-product in the urea production process. Therefore, the relevant licensing agreements were signed with Haldor Topsoe company (Denmark) for production of ammonia and Stamicarbon B.V. company (the Netherlands) for production of urea.
Production at the factory will be environmentally friendly, that is, no pollutant emissions into the atmosphere are expected. The factory will have an autonomous electricity system. The factory will consume 25-26 MW of electricity per hour.
At first, financing of construction work was carried out from the Azerbaijani state budget and about 210 million manats were allocated from there before the beginning of 2015, another 60-65 million euros were allocated by SOCAR.
But later it was decided to switch to project finance and negotiations with banks were started. As a result, the Export–Import Bank of South Korea (EximBank) opened a line of credit worth 500 million euros under Azerbaijan’s state guarantee to complete the construction of the factory.
EximBank will directly provide 251 million euros, while 249 million euros will be allocated by three commercial banks (Italy’s UniCredit S.p.A., France’s Societe Generale S.A. and Germany’s Deutsche Bank AG) with the support of EximBank.
Some 1.3 million cubic meters of gas per day will be required to operate the urea factory at full capacity.