SOCAR activities on Climate Change Mitigation Actions 2012, June Tashkent, Uzbekistan EUROPE AND CENTRAL ASIA COUNTRIES REGIONAL CONFERENCE: UZBEKISTAN’S EXPERIENCE IN ASSOCIATED GAS FLARING UTILIZATION AND IMPLEMENTATION CDM PROJECTS IN OIL AND GAS SECTOR State Oil Company of Azerbaijan Republic

SOCAR has set a goal to become a worldwide known oil company Company has representations in 10 countries, and also branches and associated companies all over the world. SOCAR enterprises and terminals operate in Turkey, Georgia and Switzerland SOCAR implements large-scale environmental projects More than 1000 hectares of lands contaminated due to 160 years of industrial oil production has been restored by recultivation. 550 thousands of trees were planted at the restored areas “International Index on Environmental Actions” issued by the Columbia University and Yale University in 2012 – Azerbaijan was ranked 2 nd on environmental protection for the last decade, and 1 st on actions mitigating climate change. SOCAR, International Oil-Gas-Chemistry Company

Environmental Strategy of SOCAR - Approval of SOCAR “Environmental Policy” - Decision on “Measures related to implementation of Framework Convention on Climate Change” - Beginning of GHG Inventory - Partnership with GGFR Inclusion of mobil sources into the GHG Inventory German “DİW econ “ Company partnership beginning “Azerigas” PU became a part of SOCAR Started measurement of transport emissions

“Azerikimya” PU became a part of SOCAR Purchase of the measurement equipment, start up of measurements Submission of “LED lighting replacement” project to the CDM Designated National Authority for registration. International Conference on “Azerbaijan Experience in the field of Associated Gas Reduction and Utilization” Environmental Strategy of SOCAR SOCAR Associated Gas Reduction Plan The pilot project on “LED lighting replacement” at SOCAR administrative buildings and Department of Ecology was carried out. SOCAR Climate Change Mitigation Strategy Waste Management Plan

Planting a forest at the area of ​​ 100 hectares by SOCAR Inventory methodology improvement Development of “Effectively use of associated gas” project with the support of EBRD and “Carbon Limits” Company Partnership with Sumitomo Company Commissioning of Ecological Park Putting into operation of renewable energy equipment Environmental Strategy of SOCAR

SOCAR carried out the GHG inventory for the last 5 years The result of GHG Inventory conducted for years are shown in below graph GHG Inventory

3 Measurement Points have been established to measure harmful emissions fro transport. Volume of transport emissions determines by instrumental methods. Vehicles do not meet Avro-2 standards after implementation of appropriate measures should be re-sent to the measurement points. Transport emissions measurements

“SOCAR Associated Gas Reduction Plan” was approved in 2010 Due to the technical measures implemented by SOCAR in 2011, the real amount of associated gas vented into the atmosphere was reduced from 436 mln m3 to 120 mln m 3. SOCAR-GGFR partnership

GGFR Europe and Central Asia Regional Committee's annual meeting was held in Baku on June of 2011 ”Azerbaijan Experience in the field of Associated Gas Reduction and Utilization“ Conference SOCAR-GGFR partnership

In 2011 measurement equipment for identification of gas emission volumes were provided and Ecological Department‘s staff was trained within the framework of technical assistance by GGFR. Special measurement methodology were prepared by SOCAR experts Auxiliary equipments were designed to support field measurement activities “Höntzsch” measuring device Auxiliary equipment SOCAR-GGFR partnership

In September of 2011, by means of instrumental measurements the volumes of associated gas emitted into the atmospheres from "Siyazanneft" oil and gas extraction unit’s (OGEU) wells were determined - the first experience. Last year, according to the results of the measurements at "Siyazanneft" OGPU 14,2 mln. m 3 /year of associated gas emissions were determined. A Feasibility Study is under preparation to collect low pressure gas from "Siyazanneft" OGPU. A measurements plan for 2012 was developed and works in this direction continues. Practical measurements

“Guneshli” OGEU : 4 mln. m 3 per day collecting associated gas compressor station was built. Station is equipped by compressors - the capacity of each one is 2 mln.m 3. The station was put into operation on 4 May 2012 “Neft Dashlari” OGEU: At the territory of OGEU in the framework of associated gas utilization project 66 vacuum compressors NQK-7/1-5 were installed Compressors are manufactured in Azerbaijan Annual collection of associated gas is 280 mln. m 3 More than 1 year the PDD of the project is at validation stage within the framework of CDM Completed projects on reducing of associated gas atmospheric emissions

Reducing of associated gas atmospheric emissions – Guneshli field, Platform №4

At present, the dry gas obtained as by-product of oil refinery sent through the pipe lines to the "Ethylene-polyethylene" plant in Sumgait city. As a result transportation costs reduced, transport and fuel used for raw materials transportation reduced, and this has led to considerable decrease of the GHG and harmful emissions into the atmosphere. Actual amount of emissions reduction is being assessed by the SOCAR’s Department of Ecology Other projects implemented by SOCAR in the field of GHG reducing

Development of “Effectively utilization of associated gas” project with the support of EBRD Data Submission for project activity by Department of Ecology. Future directions for partnership based on the results of negotiations were determined The workshop with “Carbon Limits’” is scheduled for September of 2012 Information potential small scale projects that could be financed by the EBRD was provided. Partnership with “Carbon Limits” Company

In the framework of partnership “Climate Change Mitigation Strategy of SOCAR “was developed and approved. Joint assessment of the following proposals are carried out: - Improvement of the GHG monitoring system; - Future perspectives for SOCAR Ecological Park development; - Replacement of old compressors by new ones; - Study of Use of alternative fuels for SOCAR transport vehicles; - Forest planting at the territory of SOCAR. Partnership with German “DİW econ” Company

Azneft PU SOCAR Azeriqaz PUAzerikimya PURefineryOthers OC & JE (10) OGEUTGPA(8) GDS (67) Etilen-Polietilen Plant Organic Chemistry Plant DSTT BOR named after H.Aliyev “Azerneftyaq” Oil Refinery GPP Services (7) Services (5) Sources by categories Internal consumption Annular gas (from wells) Associated gas emissions Oil treatment process technological losses Transport Electric power production First stage Second stage Improvement of the GHG monitoring system

SOCAR Ecological Park – the first demonstrative ecological project in Azerbaijan Republic. Approximately 40% of energy used in Eco Park is covered by renewable, transition to full scale alternative energy use in underway. Every year 200 thousand units of seedlings are cultivated at the Eco Park territory for vegetation of oil contaminated areas. With this project, SOCAR has achieved 3.6 thousands tons of carbon dioxide reduction per year (in CO 2 ekv.). Development of Ecological Park

Renewable energy Total area– 9,3 ha Eco – center. Development of Ecological Park

Many Refineries’ technological burners have been reconstructed. Due to above mentioned measures the amount of CO 2 emissions per 1t of oil treatment shown in the below schedule: Carbon efficiency by years (tCO 2 /t) Refineries BOR named after H.Aliyev “Azerneftyaq” OR Carbon efficiency of production

At the compressor station of “Azneft” PU Gas Storages significant number of old outdated compressors operates. In the framework of SOCAR – “DIW econ” Company partnership technical-economical assessment of the project was carried out and “Replacement of old compressors by new ones “ PIN was prepared. Compressor This project will increase the energy efficiency, but also has positive environmental impacts As a result of implementation of the project : 1.More efficient operations will help to save 18.3 million m 3 of gas and 2.will reduce the amount of CO 2 equivalent of GHG emissions into atmosphere by 37 thousand tons Next step (project idea) Replacement of old compressors by new ones

The project idea on replacement of “Azerikimya” PU ‘s old outdated buses, worked on liquid fuel by new ones, working on hydrogen was prepared. Project benefits: 1.For SOCAR: they consist of the existing of SOCAR’s chemical plants already producing Hydrogen as a by-product, so “0” cost for fuel 2.For environment: reduction to virtually zero of emissions of greenhouse gases as well as a reduction of emissions of other danger to human health gases. At present Eco Park use elektromobil vehicles for inside transportation. İn addition, for Eco Park staff and guests purchase of a new electro-bus was planned. Use of alternative fuel in SOCAR Transport system

The project idea on “Planting of forests on the territory of 100 ha of SOCAR” was developed by experts of SOCAR Ecological Department. The main purpose is to create forests at the SOCAR lands which will led to environmental improvements and most importantly will help to reduce carbon emissions. According to calculations carried out for an area of 100 ha, forest planting will led to 1,8 thousands t of CO 2 emissions reduction. After approval procedure project will be submit to CDM National Designated Authorities for registration. Planting of forests on the territory of SOCAR Yaşıllaşdırılan ərazilər

Organization of training courses in order to facilitate best practices and environmental skills dissemination among employees of SOCAR; Organization of environmental activities, Olympiads etc. for children, pupils and young generation. Every year Olympiads organize for scholars in the framework of “İNEPO- AVRASİYA” International Environment Protection Project Conduction of "Ekoerudit" Brain-Ring competitions among schoolchildren; Public awareness and work with Media. Environmental awareness

In Eco Park a number of trainings, seminars were held: In September of 2011, “Presentation of new software for the calculation of greenhouse gases emissions” training In December of 2011, Workshop on «The results of 2011 year’s cooperation between SOCAR and “DIW econ”». In December of 2011, German RENAC Renewable Academy conduct “Energy efficiency assessment and alternative energy utilization possibilities in Azerbaijan” workshop in Eco Park Educational Center Environmental awareness

Thank You for attention! Azer Aliyev SOCAR, Department of Ecology Tashkent SOCAR – in harmony with nature