Azerbaijan's Sumgayit plans to launch production of green hydrogen

It is planned to start producing green hydrogen in Azerbaijan's Sumgayit Chemical Industrial Park in 2027-2028, Kalin Runtev, CEO of the Azerbaijani-Bulgarian joint venture Caspian Lubricants Recycling, head of the Bulgarian company Torec Engineering, told Report.

“If the plant is launched in November-December this year, as planned, at the next stage, we will provide the production with green electricity, and then we will start producing green hydrogen. It will be used as fuel and as raw material for the production of base oils of the second group (hydrotreating, hydrotreating, distillate fraction, etc.). This will make us unique in the area from the South Caucasus to Pakistan - the nearest similar production is 3,000 km away,” Runtev noted.

He added that pre-project work on hydrogen production will begin in 2026. The launch of the hydrogen plant and the start of production of Group II oils are expected in 2027-2028. "Green hydrogen will be produced by water electrolysis - using local resources. The company is currently negotiating with European and Chinese suppliers of electrolyzers. The final decision will be made by shareholders after the business plan is approved. Options for the participation of international partners are also being discussed, but no specific agreements have been announced yet," said the head of the joint venture.

Runtev said that at the first stage, Caspian Lubricants Recycling plans to process up to 24,000 tons of waste oils per year - hazardous waste according to the classification of the Basel Convention.

“The main product is Group I base oil, which has not previously been produced in Azerbaijan. The plant will be the first in the Caspian region to meet environmental standards adopted in preparation for the COP29 summit. It is planned to produce up to 18,000 tons of oils and 2,000-3,000 tons of bitumen (road, insulation, asphalt) from the processed waste,” the company’s CEO emphasized.

One of the key principles of the project and the conditions for obtaining the status of a resident of the Sumgait Chemical Industrial Park is the use of exclusively local raw materials. According to Runtev, the plant will not import waste from abroad. Contracts have already been concluded with a number of car services and official car importers. Cooperation with government agencies, the Baku International Sea Port, and industrial enterprises is also being discussed.

"In general, after the launch of the plant, we will begin meetings with all major industrial players. Many international companies operating in Azerbaijan are showing great interest in our project," the head of the Bulgarian company emphasized. He noted that Azerbaijan annually consumes more than 40,000 tons of base oil: "This is a very interesting market, and we plan to sell at least half of the volume on the domestic market, as well as export products to Bulgaria, Romania, Ukraine, in connection with which preliminary agreements have already been reached. Türkiye is also considered a huge market, consuming more than 450,000 tons of oil per year.

Export is a key area for us. We are also considering the possibility of implementing similar projects in other countries, including the Central Asian states,” Runtev said. According to him, the project received strategic support at the level of the heads of state of Azerbaijan and Bulgaria. Caspian Lubricants Recycling is a resident of the Sumgayit Chemical Industrial Park under the Ministry of Economy of Azerbaijan, which provides access to the necessary infrastructure, communications, consultations and preferential financial mechanisms.

"Azerbaijan is an oasis of stability with a high standard of living and investment support. The population understands the importance of environmental responsibility. Recognition of the project as strategic increases our confidence in its successful implementation," Runtev added.

PHOTO: Vugar Khanlarov