The State Oil Company of the Republic of Azerbaijan (SOCAR) will help launch the TK-Oil oil refinery built in the territory of the Danghara Free Economic Zone (FEZ Danghara) and provide it with raw materials, the Minister of Economic Development and Trade Zavqi Zavqizoda told reporters in Dushanbe on February 13.
According to him, this issue was discussed with senior representatives of Azerbaijan’s relevant ministries and agencies as well as with SOCAR management.
“As a result of negotiations, the parties came to the conclusion that SOCAR will assist with the launch of the TK-Oil plant and in the future the company will provide it with raw materials,” Zavqizoda said.
The minister further noted that SOCAR is currently studying the documentation provided by the oil refinery.
“Work is underway, and we hope that the plant will be introduced into operation in the near future,” Zavqizoda added.
Recall, the Government of Tajikistan and China’s Dong Ying Heli Investment and Development Co Ltd signed an agreement to construct an oil refinery in the Fez Danghara in 2014 and the construction of the oil refinery with annual capacity of the processing of 1.2 million tons of oil commenced the same year.
The Tajik-Chinese joint venture TK-Oil was founded by China’s Dong Ying Heli Investment and Development Co Ltd and Tajikistan’s Hasan and Co. The share of the Chinese side in the project reportedly amounts to 90 percent and the share of the Tajik side amounts to 10 percent.
The first line of the oil refinery was expected to be operational in late 2015. Later, the sides decided to introduce it into operation by September 2016 but introduction of the refinery into operation was postponed again at first until March 2017 and then until July 2017. However, the refinery has not yet been introduced into operation.
Meanwhile, experts say it is not expedient to build such an oil refinery in Tajikistan, which does not have enough its own petroleum.
Some local experts consider that the introduction of the refinery into operation has been postponed most likely because of complexities of providing the refinery with relatively cheap raw materials.
Tajikistan does not have large reserves of crude oil, while layout of oil pipeline from other countries requires heavy expenses. Therefore, Tajikistan has to deliver crude oil to the country by transport that makes oil processing in Tajikistan inexpedient, according to them
Currently, two small oil refineries with total annual capacity of 150,000 tons operate in Tajikistan, but they are not operating at full capacity.
According to data of the Agency for Statistics under the Government of Tajikistan, these plants last year produced only 18,000 tons of oil. This covers only about 1.5% of the Danghara oil refinery in crude oil for operation in full capacity.
The Antimonopoly Agency says Tajikistan last year imported more than 1 million tons of petroleum products and 411,000 tons of liquefied natural gas (LNG). Russia provides the bulk of Tajikistan’s petroleum products imports and Kazakhstan provide the bulk of Tajikistan’s LNG imports.
The State Oil Company of the Republic of Azerbaijan, largely known by its abbreviation SOCAR, is a fully state-owned national oil and gas company headquartered in Azerbaijan’s capital, Baku. The company produces oil and natural gas from onshore and offshore fields in the Azerbaijani segment of the Caspian Sea. It operates the Heydar Aliyev oil refinery, which processes 21 out of 24 grades of crude oil and 15 different petroleum products. The plant was named after Heydar Aliyev, the third President of Azerbaijan.
SOCAR reportedly owns fuel filling station networks under its brand in Azerbaijan, Turkiye, Georgia, Ukraine, Romania, Switzerland, and Austria.
