SOCAR, Azerbaijan's state-owned energy conglomerate, announced on Monday a $7 billion investment plan to build new polyolefin production facilities in Türkiye as part of its effort to reduce reliance on imported petrochemical products and strengthen its foothold in the Turkish market.
The project, dubbed the "Master Plan," focuses on expanding production capacity at Petkim, SOCAR Türkiye's petrochemicals subsidiary based in the Aliağa region of Izmir. The initiative follows SOCAR’s earlier investments, which have totaled $18.5 billion over the past 17 years, making it the largest foreign investor in Türkiye.
The detailed engineering design (FEED) phase is expected to commence in 2025-2026 with an initial investment of $50 million, according to Kanan Mirzayev, head of SOCAR Türkiye's refining and petrochemicals division. A final investment decision is anticipated by 2026, with the facilities becoming operational between 2029 and 2034.
Reducing Import Dependency
Mirzayev emphasized Türkiye’s 90% reliance on polyolefin imports and stressed that this expansion would strengthen domestic production, reduce dependency, and significantly boost SOCAR Türkiye's revenues.
Petkim’s shares surged 5.5% following the announcement, reflecting investor optimism about the project’s potential.
Founded in 1965, Petkim became fully owned by SOCAR in 2008 after the latter acquired a controlling stake for $2.04 billion. The company currently operates 16 production plants and produced 2 million metric tons of petrochemicals in 2024, meeting 11% of Türkiye's domestic demand.
Capacity Expansion Plans
Mirzayev revealed that the new facilities would include:
The expanded facilities are expected to triple Petkim’s market share in Türkiye.
Despite ongoing challenges in the global petrochemical market, including historically low naphtha-ethylene profit margins, Mirzayev remained optimistic. He forecasted an industry recovery post-2030 and emphasized that the timing of SOCAR’s investment aligns with future growth trends.
Elçin Ibadov, CEO of SOCAR Türkiye, stated that financing options and equity allocation for the project will be finalized after the investment decision. He also highlighted SOCAR Türkiye’s broader contributions, including $209 million invested in natural gas distribution networks in Kayseri and Bursa.
SOCAR employs more than 10,000 people in Türkiye, making it a key player in supporting employment and economic growth in the country.
SOCAR officials expect the investment to significantly boost Türkiye’s domestic production capabilities while opening doors for export opportunities. Ibadov also confirmed that talks are ongoing about the potential sale of shares in Bursagaz and Kayserigaz, SOCAR’s gas distribution subsidiaries.
