SOCAR and Tekfen in Urea Project

The heads of State Oil Company of Azerbaijan Republic (SOCAR) and Turkish conglomerate Tekfen Holding have signed a Memorandum of Understanding (MoU) to build a urea plant in Azerbaijan. SOCAR is considering building the facility at its existing site in Sumgait to produce 396,000 t/y of ammonia and 660,000 t/y of urea.

Under the terms of the MoU, the parties also envision cooperating on the marketing of existing products as well as those from the new facilities.

The Baku-headquartered group said both parties will form a working group as a next phase of the project and make efforts to establish a final agreement to determine certain details. These include Tekfen Contracting Group companies’ possible participation in building the plant on an engineering, procurement and construction (EPC) basis; prospects for Tekfen subsidiary Toros Tarim to market, sell and distribute products from the plant through its network in the Turkish market as well as developing new products and marketing them in different regions of the world; Toros Tarim’s possible role in marketing, selling and distributing products from SOCAR’s existing plant until the new facility starts up; and SOCAR and Tekfen’s shareholding in the new plant.

The plant will be SOCAR’s second urea production plant at Sumgait. The company started up its first facility last year, also producing 396,000 t/y of ammonia and 660,000 t/y urea. South Korean contractor Samsung Engineering won the tender to build the plant. Output was intended to supply the domestic market with the remainder said to be destined for export to central Asian countries of Turkey and Georgia, markets on the Black Sea and Mediterranean countries.