Caspian to Build Rerefinery Near Baku

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Caspian to Build Rerefinery Near Baku
Traffic roundabout with a sculpture dedicated to the twin cities of Baku and Dakar, located at the center of Baku, Azerbaijan. © Tim Asadov / shutterstock.com

Bulgaria’s Caspian Lubricants Recycling announced plans to invest in a new base oil rerefinery near Baku, Azerbaijan, according to the state Agency for Development of Economic Zones.

During a recent business forum held in Baku, the company committed to investing 13.1 million manat (U.S. $7.7 million) to establish operations for collecting and processing used motor and industrial oils in Azerbaijan.

The facility will be located in the Sumgait Chemical Industrial Park on the Caspian Sea, near the Azeri capital of Baku. During the Azerbaijan-Bulgaria business forum, the agency, part of the Azerbaijani Ministry of Economy, granted Caspian Recycling resident status at the Sumgait park, as stated in a May 8 news release.

The production facility will occupy a two-hectare plot and is expected to employ 54 people. The agency has not specified the timeframe for the project but said the rerefinery’s products will target both domestic and export markets.

Industry observers suggested this project will benefit the country’s finished lubricant market, which is heavily dependent on imports.

Azerbaijan annually imports about $250 million of finished lubricants, Ilham Shabal, head of oil industry consultancy Caspian Barrel, recently told Azeri newspaper Kaspiy. Western brands such as Shell, ExxonMobil and TotalEnergies, have saturated the country’s market, he said.

Azerbaijan consumes around 70,000 metric tons of finished lubricants annually, according to lubricant producer Technol. Technol and Aminol are the only lubricant producers in the country, both operating blending plants in Sumgait. Technol has capacity to produce 50,000 tons of finished lubes annually, while Aminol reported an output of 30,000 tons in 2022.

Socar, a state-owned oil company, owns a 150,000 t/y API Group I base oil plant near Baku, but Shabal said it is dormant.