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Economic Development in Azerbaijan

very good year for aviation in Azerbaijan


Azerbaijan to turn into point of contact between air spaces of Europe, Asia

Azerbaijan Airspace Supervision & Efficiency Centre (ASEC) will be built at Heydar Aliyev International Airport. The relevant agreement was signed by CJSC Azerbaijan Airlines and French company Thales.

The project will be implemented within the framework of the implementation of air traffic management system (ATM) and air traffic flow management (ATFM) in collaboration with Eurocontrol.

Azerbaijan Airspace Supervision & Efficiency Centre at Heydar Aliyev International Airport will be a key center for planning of air traffic flow between European Central Flow Management Unit (CFMU), located in Brussels and Air Traffic Flow Management Center, located in Singapore.

The fast growth of the Asian and Chinese markets, as well as the strategic position of Azerbaijan contributes to growth in both internal and transit air traffic, and therefore, our country is assigned an important role in air flow management throughout the region.

Smooth implementation of ICAO Global Air Navigation Plan requirements will have a positive impact on air traffic flow growth in the future.


www.azernews.az/business/103312.html

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The new pipeline will most likely secure the plan for a pipeline between Azerbaijan and Turkmenistan

Azerbaijan, Kazakhstan plan to lay new oil pipeline

Azerbaijan and Kazakhstan are planning to lay new Eskene-Kuryk-Baku oil pipeline with a length of 739 kilometers, according to an article by Azerbaijan’s Energy Minister Natig Aliyev, published in the country’s official press Oct. 6.

The minister said that Kazakhstan has huge proven reserves of hydrocarbons, which account for 5.5 billion tons of oil and 3 trillion cubic meters of gas.

“This makes it possible for Kazakhstan to produce 33.6 billion cubic meters of gas and 80 million tons of oil per year, however, the country has no guaranteed independent, reliable and secure oil export route except the Baku-Tbilisi-Ceyhan (BTC) pipeline,” reads the article.

Capacities of Tengiz-Novorossiysk, Atyrau-Samara, Atasu-Alashankou pipelines and the route of the Caspian Pipeline Consortium (CPC) are insufficient to meet the growing export potential, according to the article.

Aliyev said that considering the capacity of these routes and the volumes of export planned to be achieved, Astana has focused on the Kazakhstan Caspian Transportation System (KCTS).

“The KCTS envisages construction of Eskene-Kuryk-Baku pipeline with a length of 739 kilometers,” the minister said in his article. “The feasibility study of the Eskene-Kuryk section of the pipeline envisages construction of an oil pumping station at the Tengiz field, Tengiz-Oporny-Uzen-Aktau main oil pipeline, an oil terminal and a new port in Kuryk village, as well as reconstruction and expansion of the port in Aktau city.”

“Construction of this pipeline will enable Kazakhstan to export its oil to ports in Georgia and Turkey,” the article reads. “The initial capacity of the new pipeline will amount to 23-25 million tons per year with the possibility of future expansion to 56 million tons.”

The KCTS must ensure the export of Kazakh oil to international markets mainly from the Kashagan field (second and third phase) via the Caspian Sea, through the Baku-Tbilisi-Ceyhan pipeline and other oil transportation systems both in Azerbaijan and other transit countries.


http://en.trend.az/business/energy/2669059.html

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for the first time since fall of the oil prices, FOREX reserves have begun to grow again
Azerbaijan and Russia are among the few oil producing countries with growing FOREX reserves

Oil Fund’s assets exceed $35.8 bn

The assets of the State Oil Fund of Azerbaijan (SOFAZ) increased by 6.7% for Jan-Sept 2016.

According to the Fund, its assets for the reported period grew from $33.57 bn up to $35.82 bn.

SOFAZ revenue was estimated at AZN 6.618 bn and expenditures at AZN 3.82 bn.

The basis of revenue for the past 3 quarters included revenue within the PSA contracts (AZN 5.88 bn), including AZN 5.867 bn from the sale of oil and gas, AZN 100,000 of bonuses, AZN 13.4 million from transit fees, and AZN 3.3 million of acre payments. The revenues from Fund’s managing assets amounted to about AZN 734.8 million.

The basis of SOFAZ expenditures consisted of transfer to the State Budget for AZN 3.26 bn, financing for Southern Gas Corridor for AZN 241.9 million, construction of Star refinery in Turkey for AZN 127 bn. Extra-budgetary expenditures of SOFAZ from foreign exchange were estimated at AZN 734.8 million.


http://abc.az/eng/news/main/99332.html

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Important deal that gives SOCAR control over major infrastructure, Greece has a big potential as an energy hub with discoveries in Egypt and Israel, goddamn EU couldn't give us a controlling stake.

Gas grid operator to be sold to Socar by the end of the month

DESFA’s privatization is in the final stretch, as sources familiar with the process say that the agreement for the transfer of a 66 percent stake in Greece’s natural gas grid operator to Azeri firm Socar will be sealed before the October 31 deadline.

Socar’s stake in DESFA’s new share capital will likely drop below 36 percent eventually as Italy’s Snam has entered the process in order to fulfill the condition set by the European Commission for the Socar stake to be reduced to a maximum of 49 percent due to European Union competition and energy security concerns. Originally Snam had been in talks to buy out 17 percent of DESFA, but it is now discussing the acquisition of at least 30 percent in the coming months.

For the time being, the Greek state will hold the remaining 34 percent.

In talks last week between Prime Minister Alexis Tsipras’s adviser Dimitris Liakos and representatives of Snam and Socar, the final details were agreed on the basis of the new approach of the three sides in the wake of Tsipras’s meeting with Socar chief executive Rovnag Abdullayev.

http://www.ekathimerini.com/212969/...r-to-be-sold-to-socar-by-the-end-of-the-month

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Great article by forbes

An Inside Look At The New Crossroads Of Eurasia: Azerbaijan's New Port Of Baku

The place was literally and figuratively a crossroads. It wasn’t just the point where north-south highways and rail lines met their east-west compliments but the turning point of an entire nation going in a new direction.

Extending out from the west bank of the Caspian Sea, the New Port of Baku at Alyat sits within 20 square kilometers of barren brown desert that’s become fertile ground for some very big dreams. Positioned 65 kilometers south of the central core of Azerbaijan’s capital city of Baku, the new port is emerging as a full-fledged intermodal transportation hub and free trade zone that’s primed to become a major station along the New Silk Road — the nascent grid of enhanced economic corridors spanning the Eurasian landmass, from China to Europe.

The creation of this new logistics junction isn’t just a move to keep in step with the times but is one that is being taken out of absolute necessity: Azerbaijan has roughly 30 years of oil left, and the country is placing an all or nothing bet on its newly emerging transportation economy. Starting in the 2000s, Azerbaijan embarked upon a national program to rejuvenate its transportation infrastructure in a bid to renew its ancient relevance as a key logistical node in the heart of Eurasia. New highways and rail lines were laid across the country, and in 2007 it was decided to take the initiative a little further and move the Port of Baku, which at that time sat in the crowded city center, out to the town of Alyat, where it would be right at the crossroads of Azerbaijan’s main transportation corridors — in a place where there was nothing if not room to grow.

This new port was set up to be the center of Azerbaijan’s new logistics economy and the predominant driver of its broader economic diversification initiative. It was to become a Caspian Sea port, a road and rail transport terminal, and a free trade zone all rolled into one and administered under the umbrella of its own special legal regime.

“We don’t view the Port of Baku as just a port,” explained Taleh Ziyadov, the port’s Cambridge-educated director-general. “It is a project that we believe is not only going to have one of the major contributions to Azerbaijan’s non-oil economy and diversification but also have a transformational impact on the region as a whole.”

The new port and FTZ at Alyat is currently a main station along the Transport Corridor Europe-Caucasus-Asia (TRACECA), which connects Europe with Central Asia and China, and is also a key stop on north-south transport routes which link Russia with the Middle East and Indian Ocean. The New Port of Baku is attempting to establish itself as a middle of the world type of place — a “hub of hubs” where Russia, Iran, Europe, Central Asia, the Caucasus, and China can be linked together.

As in the days of the ancient Silk Road, a new network of logistics, trading, and manufacturing centers are emerging across Eurasia in places such as Khorgos and Aktau in Kazakhstan, Anaklia in Georgia, Bandar Abbas in Iran, Terespol municipality in Poland, and Chongqing, Chengdu, and Lanzhou in China. Only this time rather than being built around trade markets they are being built around ports. New sea and dry ports are being leveraged as economic drivers that can support not only logistical functions but also entire commercial, industrial, and residential ecosystems — i.e. entirely new cities.

The dominant model for this type of transport-oriented development is clearly the Jebel Ali Free Zone (JAFZA) in Dubai — a booming economic zone that was intentionally built “in the middle of nowhere” around a port that sparked the creation of an entirely new, multi-faceted, and economically dynamic urban area in a matter of decades. From the Kazakh borderlands of China to the eastern fringes of Europe, I’ve heard government officials, port directors, developers, and CEOs state proudly that they are building “new Dubais.” At the New Port of Baku, the mission is very much the same.

Though technically within the municipal bounds of Baku, from the looks of Alyat township, where the new port is located, it may as well be a world away. Its modest assemblage of shoddily assembled brick and corrugated steel-roof homes are nothing like the soaring, uber-modern steel and glass high-rises and skyscrapers of the capital’s central core. But big changes are expected to come to Alyat very soon.

“In 10, 20 years time Alyat is going to emerge as a Jebel Ali city of Baku,” Ziyadov explained. “Alyat is currently about 10, 12 thousand people, but with all the development that is going to take place around the port in the free trade zone it obviously will generate new workplaces, new apartments will emerge, new schools will emerge, new businesses, new spillover effect of this free trade zone in this city will change entirely the urban stature of this place. Instead of a small town you will have quite a considerable, sophisticated, satellite town that is going to be emerging as a hub along central Eurasia.”


In September, it was announced that DP World, the Dubai company responsible for the Jebel Ali Free Zone has signed on as the main adviser for the New Port of Baku’s FTZ. This is a fitting move, as DP World is also involved in developing similar “JAFZA-like” projects at other key junctions along the emerging New Silk Road, including the Khorgos Special Economic Zone in Kazakhstan.

Currently, one of the most evident sign of Azerbaijan’s revived logistical position is found in the Port of Baku’s prominent role along the nascent southern transport corridor of the New Silk Road, which connects China and Europe via the Caucasus/ Caspian region. While the bulk of the rail traffic through the new port is regional, approximately 19 trans-Eurasian trains have rolled through. The entire intermodal journey between China and Europe via Baku takes roughly 15 days in either direction, which is two to three times faster than sea at a fraction of the cost of air.

While 95% of trade between China and Europe goes by sea, completely bypassing Azerbaijan, the type of cargo that goes overland by rail is generally high-value goods, such as electronics, specialty produce, meat, wine, and fashion items that need to be delivered fast. This can provide an opportunity for Azerbaijan to cash in on some essential value-added functions, which is where the giant free trade zone that surrounds the port comes in.

Among other non-oil sector manufacturing operations, one of the goals of the Port of Baku’s FTZ is to leverage Azerbaijan’s natural supply of petrochemical feedstock into an epicenter of plastics production and distribution.

“Your iPhones, anything that you wear, your glasses, etc. are made of some sort of petrochemical feedstock,” Ziyadov said. “Factories that are producing using this feedstock will gladly be located close to these sources.”

Like neighboring Georgia, Azerbaijan is trying to maximize its geographic position in the center of the Eurasian landmass to its economic advantage. Being roughly halfway between China and Europe, one of the Port of Baku’s biggest selling points is that companies can manufacture products closer their supply sources as well as the markets they serve — and often under advantageous regional customs agreements.

Rather than just being a network of trans-continental trade routes that merely get products between industrial starting points in China and consumer endpoints in Europe, intermediary industrial hubs are emerging at every station along the various routes of the New Silk Road — often in places that previously had little semblance of such activity before. Essentially, a portion of Eurasia’s manufacturing capacity is being spread from coastal regions in China and Western Europe farther inland, eventually meeting at places in the middle like Baku, which will add more dynamism and versatility to the entire continent’s supply chains.

The master plan for New Port of Baku was designed by Royal HaskoningDHV, a prestigious 135 year old Dutch infrastructure development firm.

The 400 hectare port and FTZ will be built in three phases. In November of 2010, Azerbaijan’s President Ilham Aliyev laid the first stone of phase I, which is expected to have an annual capacity of 10 million tons of cargo and 50,000 TEU by 2017. Phase II will up this capacity to 17 million tons and 150,000 TEU. While phase III will ultimately see a large-scale inland port with a yearly capacity of 25 million tons of bulk cargo and 1 million TEU.


The current incarnation of the New Port of Baku is very similar to the old port that was once in the center of the city. It is essentially a two-berth train ferry terminal with regular services to Aktau in Kazakhstan and Turkmenbashy in Turkmenistan on the other side of the Caspian (one of just 30 such train ferry systems in the world). Surrounding the ferry terminal is an expansive lot for trucks and a depot for trains.

I arrived on a hot summer day just as a ferry was being loaded. A draw bridge was lowered and connected to the end of the ferry, a set of tracks ran fluidly from the shore into the belly of the ship. Slowly, rail wagons loaded with containers and bulk cargo like coal, agricultural products, and sugar were rolled onto the boat. The larger ferries can hold up to 52 wagons, which are divided between two floors. In three hours the ferry was loaded; 21 hours later it was on the other side of the Caspian in Kazakhstan.

As of now, there is still an excess of barren dirt lots surrounding the ferry terminal at the New Port of Baku. From the ferry docks you can see backhoes and construction equipment at work on other terminals and the FTZ beyond. But in this era of rampant infrastructure development, lots of dirt often means lots of something else: potential.

“You need to have vision to come here,” said Eugene Seah, the Singaporean operations manager at the New Port of Baku. “You can say that we are landlocked, which we are if you think that things are like this and don’t imagine that things can change.”

Change is what Azerbaijan is currently all about as the country attempts to make a monumental turn at a historic crossroads.

by Wade Shepard

http://www.forbes.com/sites/wadeshe...-azerbaijans-new-port-of-baku/3/#5e07a02d2031

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So happy to see Azerbaycan developing and going forward! Keep the good work going...
 
Smart move buying the pipeline operator in Greece, reminds me a bit of Gazproms activities in Europe.
 
Azerbaijan completes link to Iranian border

AZERBAIJAN: Tracklaying on an 8·3 km extension of the Azerbaijan Railways network from Astara station to the River Astarachay, which marks the border with Iran, was completed on November 7.

The 1 520 mm gauge line will cross the border on an 82·5 m long bridge which has been under construction since April, and then continue a further 1·7 km to the Iranian town of Astara. Here there will be transhipment facilities with a 164 km long 1 435 mm gauge line which is under construction to link Astara with the Iranian network at Rasht. This is expected to open next year, completing the north–south rail corridor from Iran’s ports to Russia and Europe via the west side of the Caspian Sea.

The first direct freight service from India to Russia along the corridor ran in late September and early October, with the sea and rail journey between Mumbai and Moscow taking 23 days, including road transport for the 180 km between Rasht and Azerbaijan.

http://www.railwaygazette.com/news/...rbaijan-completes-link-to-iranian-border.html

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@Serpentine




 
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