Market Trends of Azerbaijan Oil and Gas Downstream Industry
This section covers the major market trends shaping the Azerbaijan Oil & Gas Downstream Market according to our research experts:
Petrochemicals Plants is Expected to Witness Growth
- The petrochemical business produces chemicals through several process steps such as cracking, condensation, or distillation, where intermediate or end products are generated under precisely regulated pressure and temperature conditions.
- In 2022, SOCAR Polymer is expected to increase production to 237,000 tonnes. SOCAR Polymer includes plants for the production of polypropylene and high-density polyethylene with an annual capacity of 184,000 tonnes and 120,000 tonnes per year, respectively.
- Natural gas production in the country increased by 23.3%, from 2.50 Billion cubic feet per day ( Bcf ) in 2020 to 3.08 Bcf in 2021. Natural gas consumption in the country accounted for 1.2 Bcf in 2021, which is expected to increase in the forecast period. An increase in natural gas consumption is likely to be used as a feedstock for the petrochemical industry.
- Hence, a further increase in petrochemical plants is expected in the forecast period due to the government's efforts to modernize the downstream sector.
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Increase in Production of Oil and Natural Gas to Drive the Market
- Azerbaijan's one of the most essential crude oil blends is the BTC, with API gravity of 36.6, a high quality, and low sulfur 0.16% crude oil. The oil grade is of excellent quality and requires a low level of refining maintenance and equipment.
- Oil consumption in the country increased by 4.3%, from 91 thousand barrels daily in 2020 to 95 thousand barrels daily in 2021. Oil production increased by 1.2% from 714 thousand barrels daily in 2020 to 722 thousand barrels daily in 2021.
- In Azerbaijan, the capacity of refineries in 2021 increased to 135 Thousand barrels daily, with a 12.5 % jump compared to 2020. The refinery throughput increased considerably by 2.8% to 118 kb/d in 2020 from 121 kb/d in 2021. As the production of oil and gas increases, throughput is also expected to increase in the forecast period.
- Hence, the Azerbaijan oil and gas downstream market is expected to grow slightly in the forecast period due to an increase in oil and gas production in the country.
