Azerbaijan, Turkey launch pipeline for gas shipments to Nakhchivan

Azerbaijan and Turkey launched a gas pipeline between Igdir in eastern Turkey and Azerbaijan's Nakhchivan Autonomous Republic on Wednesday, as per Interfax.

Azerbaijani President Ilham Aliyev and Turkish President Recep Tayyip Erdogan attended the gas pipeline inauguration ceremony via videoconference.

"The project, which we are opening today, will ensure the energy security of Nakhchivan," Aliyev said.

Gas flowing from Azerbaijan to the Nakhchivan Autonomous Republic via Turkey will solve the autonomous republic's gas supply problem, he said.

In turn, Erdogan said that the pipeline will supplement "our previous strategic initiatives in the energy sector,".

"This project will meet Nakhchivan's natural gas needs in the next 30 years," he said.

Azerbaijani Energy Minister Parviz Shahbazov said at the ceremony that the project will help diversify gas supplies to Nakhchivan and improve welfare of residents of the Nakhchivan Autonomous Republic and Igdir.

"Yet another feature of the project is that the pipeline's maximum capacity today is 730 million cubic meters per year, but could expand in future," Shahbazov said.

The pipeline also can be operated in reverse mode, which speaks volume about its great importance for the region, he said.

It was reported earlier that the groundbreaking ceremony for the pipeline in the Azerbaijan's Nakhchivan Autonomous Republic, which does not border Azerbaijan, took place in September 2023. The 16-inch pipeline from Igdir to the autonomous republic's Sadarak district is 97.5 kilometers long, including 17.5 kilometers in Azerbaijan and 80 kilometers in Turkey. In Turkey, the pipeline has become a continuation of a gas main from Eastern Anatolia to Igdir.

In future, a minor upgrade will allow to increase the pipeline's capacity to 5 million cubic meters daily, or 1.8 billion cubic meters per year.

SOCAR Midstream Operations, a subsidiary of the State Oil Company of the Azerbaijani Republic, and Turkey's Botas implemented the project.

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French automaker Renault, which has left Russia, could still return to car maker Avtovaz as a shareholder, but no such talks are currently underway, Sergei Chemezov, the head of Rostec, which owns 32.3% of Avtovaz, told journalists on the sidelines of the RSPP congress on Tuesday, as per Interfax.

Asked whether Renault returning to the Russian automaker as shareholder was a thing of the past, Chemezov replied: "Not at all? Why? This is not a thing of the past. Of course, it is necessary - to come back. If they agree to it."

The head of Rostec did not outline the conditions for a potential return of Renault. He said there were no substantive discussions on this matter yet. "No, there are no negotiations yet," he said, commenting on the possibility of Renault returning to Avtovaz.

Renault sold its Russian plant and 68% stake in Avtovaz in 2022 in deals for a token amount of 1 ruble, writing off 2.2 billion euros after discontinuing operations in Russia at the end of that year. The company retained an option to buy back its stake in the Russian automaker within six years.

The Financial Times quoted Renault CEO Luca de Meo in late February as saying when asked about a possible return to Russia that "I haven't thought about that kind of scenario because everything is moving so constantly." But at the company intends to "let's see how things go," he said. "I'd rather focus on building the future than catching up on the past...but we're business people. When we see a business opportunity, we'll try to grasp it," he said.

Avtovaz CEO Maxim Sokolov told reporters later that the option for Renault to regain its stake in Avtovaz could only be exercised if the French automaker reimbursed the investments made in his absence in the development of the Russian enterprise. He said this was estimated at more than 110 billion rubles for 2023-2025.

"We need to look at the paperwork, including the additional conditions under which this call option can be revealed. When I became Avtovaz CEO, I did not analyze this document, it was not important in 2022, when we were raising the plant from its knees and it was idling. But, as far as I have heard, the volume of investments made by both the state and the enterprise itself during this period should be assessed there," Sokolov told reporters, commenting on Renault's possible return.

"As for the volume of investments, I have already mentioned these figures many times. They exceed the average annual investment volumes made directly by the previous shareholder, Renault. In the twenties, it allocated 20-22 billion rubles annually for the development of the enterprise to renew capacity. In 2023, our investment volume amounted to more than 27.5 billion rubles, and in 2024 the figure was close to 40 billion rubles. In the plan for the current year, 2025, this will probably be at least 45 billion rubles. Clearly these investments will have to be compensated somehow if they return and the entry fee will definitely not be equal to the exit fee of a ruble," Sokolov said.

But no specific negotiations between the concerns have yet been reported. In addition, Avtovaz said later that the company develop successfully and ensure technological sovereignty on its own and was not waiting for Renault to return.

The sole shareholder of Avtovaz, according to the latest publicly available information, is currently Avto Holding LLC, whose participants at the end of 2024 were the NAMI federal state unitary enterprise with 67.7% and Rostec with 32.3%.

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Russian Railways (RZD) expects freight traffic on connections with China to grow by at least 8% in 2025, RZD first deputy CEO Sergei Pavlov said on the sidelines of the TransRussia exhibition, as per Interfax.

He said freight traffic to and from China rose 9% in the first two months of 2025. "I think that there will be an increase of at least 8% for the year," Pavlov said.

He attributed the slight slowdown of the growth in freight traffic to the fact that summer line work and overhauls on railways are set to begin soon. "The winter months now, this is the maximum performance of railways," Pavlov said.

RZD carried 174 million tonnes of freight on connections with China in 2024, up from 161 million tonnes in 2023.

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SM prices trended downward in Asia on Monday, as per Polymerupdate.

An industry source in Asia informed a Polymerupdate team member, "Prices decreased on the back of weak demand trends in the Asian markets."

The source added, "Bearish upstream benzene values further pushed SM prices down in Asia.”

On Monday, FOB Korea SM prices were assessed at the USD 970-980/mt levels, down USD (-15/mt) Friday's assessed levels.

CFR China SM prices on Monday were assessed at the USD 980-990/mt levels, a drop of USD (-15/mt) from Friday.

Meanwhile, upstream benzene prices on Monday were assessed at the USD 820-830/mt FOB Korea levels, a fall of USD (-10/mt) from Friday.

We remind, Lotte Chemical, one of South Korea's leading petrochemical companies, resumed production of styrene monomer in Daesan (Seosan, South Korea) on March 2 after a short scheduled maintenance. The plant, with a capacity of 580,000 tons of styrene per year, was shut down for maintenance on February 25.

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LyondellBasell (LYB.N), opens new tab said on Tuesday the chemical firm and Covestro have decided to permanently close the Propylene Oxide Styrene and Monomer production unit at the Maasvlakte site in the Netherlands, as per Reuters.

The chemical industry has been grappling with weak demand and high input costs in Europe, and a challenging regulatory environment has further pressured companies to rethink their strategies in the region.

"The decision comes after thorough and careful consideration and is driven by the continued pressure on Maasvlakte's profitability due to global overcapacities, a strong increase of imports from Asia and high costs of European production," LyondellBasell said.

"Unfortunately, this situation is expected to continue, so longer-term profitable production is not anticipated," the company added.

Last year, LyondellBasell had launched a strategic review of its European assets of its Olefins & Polyolefins and Intermediates & Derivatives business units.

The company said it has taken the next step in evaluating the option to seek alternative ownership for the O&P sites in the strategic assessment.

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