Azerbaijan’s state-owned energy giant SOCAR announced plans for a $7 billion (TL 247.29 billion) investment to reduce Türkiye’s heavy reliance on imported petrochemical products. As Türkiye’s largest foreign investor, SOCAR has already invested approximately $18.5 billion over the past 17 years. This ambitious new initiative, dubbed the "Master Plan," focuses on expanding production capacity at SOCAR Türkiye’s subsidiary, Petkim, based in Aliaga in Izmir province. The plan will see the establishment of several new polyolefin production facilities and is expected to be implemented over the next five to ten years.

SOCAR Türkiye’s CEO, Elçin Ibadov, highlighted the strategic importance of the investment, which will not only bolster Türkiye’s petrochemical production but also significantly enhance SOCAR’s revenues. Currently, Türkiye imports up to 90% of its polyolefins, a key input for various industries, as per several media reports. This investment aims to address that dependency while strengthening SOCAR Türkiye’s market position. Kanan Mirzayev, head of SOCAR Türkiye’s refining and petrochemicals division, revealed that a detailed front-end engineering design (FEED) for the new facilities will be developed between 2025 and 2026, requiring an initial $50 million investment. The final investment decision is expected by the end of 2026.

Following the announcement, Petkim’s shares surged by 5.5% on Monday. Founded nearly 60 years ago, Petkim became wholly owned by SOCAR in 2008 after the Azerbaijani energy giant acquired a controlling stake for $2.04 billion. Currently, Petkim operates 16 production plants and produced 2 million metric tons of petrochemicals in 2024, meeting about 11% of Türkiye’s domestic demand. The expansion plan is expected to further solidify Petkim’s role as a key player in Türkiye’s petrochemical sector.

The project is being launched amid global challenges in the petrochemical industry. Demand is expected to remain sluggish until 2030, with capacity utilization rates projected to decline before rebounding in subsequent years. Profitability indicators, such as the naphtha-ethylene spread, are at historic lows but are expected to improve as the sector enters a growth phase. Petkim’s 2022 market assessment identified ethylene production and polymerization as products with the highest potential for growth in Türkiye’s domestic market, shaping the focus of this investment.

The proposed facilities will include capacities of 1.2 million tons per year for ethylene, 550,000 tons per year for polypropylene, and 827,000 tons per year for HDPE/LLDPE. While the total cost of the project will be determined after the final investment decision, SOCAR plans to proceed during a market upturn. Financing methods and equity allocations will be decided in subsequent stages. Upon completion, the investment is expected to triple Petkim’s domestic market share, reducing Türkiye’s import dependency and further advancing SOCAR’s strategic goals.