Azerbaijani lubricant marketers are grabbing the opportunity to fill the export void left by Russia’s invasion of Ukraine, which has triggered boycotts of Russia’s oil, gas and refining products.
The Russian lubricant market is becoming increasingly isolated, while Ukraine has suffered destruction and halted production as a result of the hostilities in its territory.
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European Commission President Ursula von der Leyen visited the Azerbaijan capacity city of Baku July 18, in an attempt to reduce the EU’s reliance on Russian energy. Since then, Azerbaijan has reached an agreement to double its gas exports to the European Union by 2027, which the country’s government believes could ultimately benefit all Azeri energy imports, including lubricants.
Azerbaijan has thriving upstream and downstream sectors with oil and gas fields as well as pipelines used to ship energy products within the region and to Turkey, Greece and on to Western Europe. The Trans Adriatic Pipeline (TAP, part of the southern gas corridor) carries natural gas to the European markets.
Azerbaijan’s Agency for development of economic zones recently issued a statement saying that over the past three months Aminol, one of the three larger lube producers in the country, exported 6,000 tons of finished lubricants to Spain and Bosnia and Herzegovina. The company said it ships products to a dozen more European countries.
Ten years ago, finished lubricant production was nonexistent in Azerbaijan. Since then, the country has opened at least three new lube-blending and grease-production facilities.
Technol and Millers Oil Azerbaijan, began operations in 2017 and 2018, respectively. Technol is privately owned and has the capacity to make 50,000 tons of finished product annually. Millers Oil Azerbaijan is a 50-50 joint venture between the Azerbaijan National Academy of Science and the British lube producer and has the capacity to make 13 million liters per year. A Technol official said Azerbaijan has about 70,000 tons of annual lubricant demand.
Aminol, another independent lubricant producer active in the country, began operations in 2017, and its activities and shipments have doubled since then. Its plant is located in the Sumgait chemical industrial park on the Caspian Sea near the capital city of Baku.
“Our exports to Europe and other regions are increasing,” Yusif Aliyev, co-owner and vice chairman of Alco LLC, which is Aminol’s parent company, told Lube Report. “We produced 30,000 tons in 2021 and we are well on track to reach the 50,000-ton mark in 2022.”
In 2020, Aminol’s output was only 18,000 tons. The company attributes its growth to increasing exports to Europe, the Middle East and North Africa, some countries of the Commonwealth of Independent States and Central Asia.
“Ninety percent of our products are made for exports,” Aliyev said. “We ship to 25 countries, such as Turkey, Uzbekistan, Turkmenistan, Ukraine and Georgia. Our main export markets in Europe are the United Kingdom, Spain, Italy, Romania, Bulgaria, Moldova and the Netherlands, as well as Croatia, Bosnia, Lithuania and others.”
These sales are made under government contracts and business-to-business agreements. “Only 10% of our sales are realized on the Azerbaijani market,” he said.
In a separate statement the company described its long-term goal:
“In 2022 we established new supply channels and strengthened ties in Western and Eastern European markets,” the company said. “Aminol aims to establish itself as a key player in the commercial lubricants markets in Europe.”
The Aminol plant’s blending and filling equipment was installed by the German engineering company Fluid Solutions. It produces a wide range of lubricants, such as passenger car, heavy-duty and motorcycle engine oils, along with Gost standards engine oils, marine lubricants, transmission, gear and industrial oils. Gost is a specification used in older Russian and Soviet-made cars, machinery and equipment.
Aminol also makes car chemistry products, like coolants and sprays.