Shah Deniz partnership awards Stage 2 contracts

Photo: Shah Deniz partnership awards Stage 2 contracts / Oil&Gas

Baku, Azerbaijan, Dec. 19

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The Shah Deniz partnership has announced that it has awarded two major construction contracts for Stage 2 development of the Shah Deniz gas field in the Caspian Sea, according to a message from the BP Azerbaijan.

"This follows the final investment decision for the Stage 2 development signed in Baku on 17 December," the BP Azerbaijan said.

The first contract is for the construction and commissioning support of the Shah Deniz Stage 2 onshore terminal facility at Sangachal near Baku. This contract has been awarded to Tekfen-Azfen which is an alliance between Tekfen Insaat ve Tesisat A.S. and Azfen JV. The scope of work for this contract includes construction of the main gas and condensate processing facilities at the Sangachal terminal, gas, condensate and MEG pipeline installation from the offshore pipeline beach landing site to the terminal facilities and brownfield works in the existing Sangachal Terminal.

"The value of this contract is $998 million. The work under this contract is planned to commence in January 2014 with completion expected in 2018," according to the message.

The second contract is for the fabrication, load out and offshore hook-up and commissioning of the topsides units of the two Stage 2 platforms - Production and Risers platform (SDB-PR) and Quarters and Utilities platform (SDB-QU), the BP Azerbaijan said.

"This contract has been awarded to the AMEC-Tekfen-Azfen (ATA) consortium which is comprised of AMEC MMC, Tekfen Insaat ve Tesisat A.S. and Azfen joint venture. Both topsides units will be built at the ATA fabrication yard in Bibi-Heybat near Baku. The value of this contract is $974 million. The construction works under this contract are also planned to commence in January 2014 with the completion expected in 2018," according to the message.

The Shah Deniz Stage 2 project will bring gas from the Caspian Sea to markets in Turkey and Europe, opening up the 'Southern Gas Corridor'. Shah Deniz Stage 2 is expected to add a further 16 billion cubic meters per year (BCMA) of gas production to the approximately 9 BCMA from Shah Deniz Stage 1.

This Stage 2 development of the Shah Deniz field, which lies some 70 kilometres offshore in the Azerbaijan sector of the Caspian Sea, is expected to include two new bridge-linked production platforms; 26 subsea wells to be drilled with 2 semi-submersible rigs; 500 kilometres of subsea pipelines built at up to 550 metres of water depth; a 16 bcma upgrade for the South Caucasus Pipeline (SCP); and expansion of the Sangachal Terminal. The Trans-Anatolian Pipeline (TANAP) will transport gas across Turkey and the Trans-Adriatic Pipeline will transport gas from the Turkish-Greek border to Italy.

The Shah Deniz consortium announced the final investment decision (FID) for the Stage 2 development on 17 of December. This decision has triggered plans to expand the South Caucasus Pipeline through Azerbaijan and Georgia, to construct the Trans Anatolian Gas Pipeline (TANAP) across Turkey and to construct the Trans Adriatic Pipeline (TAP) across Greece, Albania and into Italy. Together these projects, as well as gas transmission infrastructure to Bulgaria, will create a new Southern Gas Corridor to Europe.

The Shah Deniz co-venturers are (after recent acquisitions): BP, operator (28.8 per cent), SOCAR (16.7 per cent), Statoil (15.5 per cent), Total (10 per cent), Lukoil (10 per cent), NICO (10 per cent) and TPAO (9 per cent). These percentages include the recent purchases of equity from Statoil by BP and SOCAR, respectively, which are subject to conditions that are expected to be satisfied in 2014 for completion of the transactions.

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