Tier One player, Air Liquide, has signed license, engineering and guarantee agreements with the Heydar Aliyev Oil Refinery to construct a new hydrogen (H2) production unit at the Baku refinery in Azerbaijan.

The industrial gas corporation will process, design and construct the new facility, which will produce H2 at 99.9% purity.

Although specific financial details were not disclosed, it is understood that this latest development forms part of the framework already in place for the State Oil Company of Azerbaijan Republic’s (SOCAR’s) overall reconstruction and modernisation of the refinery, which aims to increase total production capacities across the facility.

At the end of 2014, SOCAR announced its decision to close and subsequently merge processing activities at its Azerneftyag refinery with those of the nearby Heydar Aliyev refinery in the country’s captial. At the time, SOCAR issued a statement, saying, “The move is intended to eliminate economically inefficient production activities and management structures associated with the operation of two separate refineries.”

Baku-Azerbaijan-map

Air Liquide is the latest industrial gas corporation to be involved in SOCAR’s reconstruction project, which will run until at least 2019. As part of the modernisation initiative, Amec Foster Wheeler previously signed a front-end engineering design (FEED) contract on 11th March 2016, with Italian company, KT-Kinetics Technology S.p.A, signing an agreement for a new sulphur removal unit the month prior.

The refinery currently produces 6 million tonnes of crude oil, with the completed upgrade increasing this capacity to 7.5 million tonnes, along with increasing its catalytic cracking unit’s capacity from 2 million to 2.5 million tonnes per year and introducing the production of Euro 5 oil products.

The H2 plant will most likely operate on a captive basis where the end-user, in this case SOCAR, owns and operates the plant for its own consumption, and does not sell or produce any additional capacity to the merchant market

James Barr, Business Analyst for gasworld Business Intelligence, explained, “This is the second new industrial gas capacity announcement for Azerbaijan in the past nine months. In October 2015, reports suggested that SOCAR had signed an agreement with Russian manufacturer, Cryogenmash, to supply an air separation unit (ASU) for the company’s petrochemical complex in Sumgait, situated 30km north of Baku.”

Barr went on to explain the reverberations, or lack of, that Air Liquide’s contribution will have on the industrial gases market across the Eastern European country, “Neither of these recently announced capacity additions will have an impact of the value of the commercial industrial gas market in Azerbaijan. Both the proposed ASU and the H2 plant will most likely operate on a captive basis where the end-user, in this case SOCAR, owns and operates the plant for its own consumption, and does not sell or produce any additional capacity to the merchant market.”

Domenico D’Elia, Vice-President and Chairman of Air Liquide Global E&C Solutions represented the French organisation at the signing ceremony, which took place on 3rd May, 2016, along with several executive members of SOCAR.

 

SOCAR is a wholly state-owned national oil company headquartered in Baku, Azerbaijan, and is one of the largest fossil fuel corporations in the world.