Situated in a strategically significant geopolitical space at the intersection of major global transportation and logistical routes, Azerbaijan has historically served as a nexus for East-West and North-South communication corridors. Its advantageous geographical location has facilitated the formation of international trade flows passing through the Caspian republic for many centuries. However, being uniquely positioned at the crossroads of civilizations merely represents potential; realizing this potential requires the right strategy and developed infrastructure. Hence, Azerbaijan is investing substantial resources in its transportation sector. At a time when the significance of maritime transport is rapidly increasing, the construction and maintenance of maritime and river vessels have become one of the most promising avenues for cooperation in the Caspian region.
Responding to Global Challenges
A new era in the development of the transportation and logistics sector across the region was marked by the opening of the largest Caspian Sea shipyard in September 2013, the Baku Shipyard. Its founders include the State Oil Company of Azerbaijan (SOCAR, owning 87.47% of shares), the Azerbaijan Investment Company (AIC, 8.95% of shares), and Keppel Offshore Marine (KOM, 3.58% of shares). The shipyard, resembling a steel giant, towers above the water’s surface. Its robust slips are capable of servicing vessels of all types and sizes, from small tug boats to tankers and subsea construction vessels (SCV). Work here never ceases – ship construction is combined with repair and retrofitting activities.
Azerbaijan already possesses the largest trading fleet on the Caspian, but the government is not content to rest on its laurels. Considering the growing needs of international freight carriers, the production volume is planned to increase from 5–8 to 20 vessels per year. Azerbaijan is an integral part of the routes of many international corridors, one of which is the Trans-Caspian International Transport Route or Middle Corridor. In recent years, amidst changing geopolitical dynamics, demand for this route and its prospects for further development have significantly increased. Starting in China, the Middle Corridor then traverses through Kazakhstan and exits into Azerbaijan’s Caspian waters. From here, cargo is transported to Georgia, Turkey, and further into Europe. The route operates in both directions. In 2023 alone, freight transportation along this route increased by 64%.
Passenger ferry – AZERBAIJAN
The growth in production at the Baku Shipyard is also incentivized by a special tax regime. The shipyard is a resident of the Garadagh Industrial Park – one of the country’s industrial zones, whose residents are exempted from paying a range of taxes and customs duties for 10 years.
Khankendi SCV (Subsea Construction Vessel)
At the Heart of Production
Stepping onto the premises of the shipyard, we immerse ourselves in the world of modern shipbuilding technologies. Spanning 72 hectares, 50 of which constitute the pulsating heart of production. Hull, pipe, electrical, mechanical, and paint workshops – all form a harmonious orchestra of steel and metal, where vessels meeting the most stringent modern requirements come to life. Powerful lifting cranes, akin to steel arms, stand ready to hoist any load. The floating dock, a steadfast ally, can accommodate vessels of all types and sizes. Today, the plant is capable of producing up to 25,000 metal structures annually. In terms of real examples, this translates to 4 tankers with a capacity of 15,000 tons and 4 supply vessels per year.
Zangilan tanker
Over the past decade, the shipyard has constructed 12 vessels of various types: crew boats, passenger and cargo ferries, subsea construction vessels, and others. Among the largest projects of the shipyard are SCV “Khankendi”, the tankers “Khoshbakht Yusifzadeh”, “Lachin”, and “Kalbajar”. The fourth tanker, “Zangilan,” measuring 141 meters in length and with a deadweight of 8,000 tons, was officially commissioned on July 2, 2024.
Lachin tanker
Academician Khoshbakht Yusifzadeh tanker
“Zangilan”, like its predecessors, will navigate international waters. Transporting Azerbaijani goods abroad through Azerbaijani companies enables the country to generate additional revenue.
Zangilan tanker
The Baku Shipyard is not only one of the leading players in the region in shipbuilding but also a significant center for ship repairs. Recognized far beyond the borders of the Republic, today, the Baku Shipyard successfully repairs vessels from Kazakhstan and Turkmenistan. The plant has undergone an intensive development path, having carried out over 170 operations for the repair of vessels of various complexities.
What truly makes the shipyard unique is its aspiration for new horizons. Recent research has shed light on its monumental potential. During breaks between ship construction and repairs, the Baku Shipyard is capable of producing floating and land-based wind turbines. The wind and solar energy potential in Azerbaijan amounts to 27 GW, with an additional 10 GW in Karabakh and Eastern Zangezur, as well as 157 GW of wind energy in the Azerbaijani sector of the Caspian Sea. Considering Azerbaijan’s enormous wind energy potential, the Baku Shipyard can play a leading role in the further development of the alternative energy sector.
Baku Shipyard
The growing transport and logistics potential of Azerbaijan, along with the burgeoning maritime freight transport against the backdrop of the country’s increasing focus on expanding green energy, present immense opportunities for the Baku Shipyard. Undoubtedly, the enterprise is ready to embrace new challenges to continue forging ahead on the waves of the future.