BP group okays FEED for second-stage Shah Deniz development
BP PLC and partners in the Shah Deniz consortium have approved initial work on second-stage development of their giant natural gas and condensate field offshore Azerbaijan in a step that will include selection of an export route across Turkey and into Europe (OGJ, Feb. 6, 2012, p. 108).
BP said the group has decided to proceed with front-end engineering and design of a development stage that would add 16 billion cu m/year of gas production to Shah Deniz output, now about 9 billion cu m/year, including about 50,000 b/d of condensate.
The field, in 50-500 m of water 70 km southeast of Baku, holds an estimated 30 tcf of gas and condensate.
Second-stage development, costing an estimated $25 billion, would include the drilling of 26 subsea wells by two semisubmersible rigs, installation of two bridge-linked production platforms, laying of 500 km of subsea pipelines in water as deep as 550 m, upgrade of the South Caucasus Pipeline by 16 billion cu m/year, and expansion of the Sangachal Terminal.
Rashid Javanshir, president of the Azerbaijan, Georgia, and Turkey Region of BP, said engineering studies, commercial agreements, and support of the Azerbaijan and other governments “give the Shah Deniz consortium the confidence to embark upon this FEED phase.”
The consortium signed gas sales and transit agreements with Turkish pipeline company BOTAS and the Turkish government last October under an intergovernmental agreement between Turkey and Azerbaijan.
Since then, BP noted in a press statement, agreements have been signed allowing engineering studies for the Trans Anatolia Pipeline transiting Turkey (OGJ Online, Dec. 1, 2011).
Options for gas transportation to Europe, BP said, are the Trans Adriatic Pipeline to Italy, the Nabucco West pipeline through Eastern Europe, and South East Europe Pipeline through Hungary, Bulgaria, and Romania.
“The Shan Deniz consortium will make a final route selection in 2013,” BP said.
BP operates Shah Deniz II with 25.5% interest. Statoil also holds 25.5% interest, with the balance divided among State Oil Company of Azerbaijan Republic, Lukoil, Total, and Naftiran Intertrade Co., 10% each, and Turkish Petroleum AO 9%.
Bob Tippee | Editor
Bob Tippee has been chief editor of Oil & Gas Journal since January 1999 and a member of the Journal staff since October 1977. Before joining the magazine, he worked as a reporter at the Tulsa World and served for four years as an officer in the US Air Force. A native of St. Louis, he holds a degree in journalism from the University of Tulsa.
