Last checked at 
* Azerbaijan has completed three new plants in past year
* Plans new Turkish plant in partnership with BP
* Expects $2 bln in 2019 non-oil exports, up from $1.7 blnin 2018
By Margarita Antidze and Nailia Bagirova
BAKU, Aug 6 (Reuters) - Azerbaijan is betting onpetrochemicals investment to diversify its oil and gas-dependenteconomy, industry and government officals told Reuters.
Plummeting global oil prices five years ago sent the formerSoviet energy producer's economy into decline, devalued itscurrency and led to bankruptcies among its commercial banks.
But lessons appear to have been learned as Azerbaijan hassought additional sources of revenue, investing in petrochemicalplants at home and abroad as it chases the bigger margins fromturning crude oil into plastics rather than oil products.
Construction has been completed on three new petrochemicalplants in Azerbaijan over the past 12 months. The plants areproducing polypropylene, carbamide and high-densitypolyethylene.
Azerbaijan also produces methanol and other petrochemicalsand plans to begin construction of a new petrochemicals plant inTurkey to produce various materials in partnership with Britishoil major BP at the end of 2020, aiming to complete theproject within three years, said BP and state-controlled Azerioil and gas company SOCAR.
Plans to construct a second carbamide plant in Azerbaijanwith Tekfen will also boost the South Caucasuscountry's potential as a petrochemicals exporter.
"Azerbaijan is deliberately conducting a policy of non-oilsector development," Vahit Akhmedov, a member of Azerbaijan'sparliamentary economic policy committee, told Reuters.
"Development of petrochemicals is one of the priorities asthis sector will bring good profits and provide the country withthese products."
Oil and gas account for about 95% of Azeri exports and 75%of government revenue, with the hydrocarbon sector alsogenerating about 40% of the country's economic activity, makingthe Caspian Sea republic particularly vulnerable to a downturnin gas and crude prices.
"Rapid development of the petrochemicals sector will help usto support economic growth if the oil price falls," said SOCARvice president Suleyman Gasimov.
Oil output in Azerbaijan, led by BP and SOCAR'sAzeri-Chirag-Guneshli oilfields (ACG), has been stable over thepast couple of years. BP and SOCAR say that ACG, which has sofar produced 3.5 billion barrels of oil, has the potential topump a further 3 billion barrels by 2050. Azerbaijan is also amajor producer of gas in the region, aiming to export suppliesto Europe.
"Azerbaijan's oil and gas reserves are enough for rapid andsuccessful development of the petrochemicals industry," anindustrial source told Reuters.
New enterprises have allowed the country to satisfy domesticpetrochemicals demand while boosting exports, with Azeriofficials saying total petrochemical exports are projected toreach $241 million this year, up from $190 million in 2018.
Its export markets for petrochemicals include Georgia,Turkey, Russia, Ukraine, Europe, China, Egypt and Israel. Othernon-oil exports, including the agriculture and mining sectors,are projected to grow to $2 billion in 2019 from $1.7 billionlast year, Azeri officials said.
"We are confident that 15% of the growth in non-oil sectorexports this year will be from the petrochemicals sector," saidRamil Huseyn, analyst at the Baku-based Centre for Analysis ofEconomic Reforms and Communication.(Writing by Margarita AntidzeEditing by David Goodman)
