Azerbaijan Postpones Date of Beginning Realization of Stage-2 on Shah Deniz Field (video)

Oil&Gas Materials 1 October 2007 19:19

Azerbaijan, Baku /corr. Trend VSharifov / The official representative of the Norwegian StatoilHydro Azerbaijan said on October 1st that the delays in drilling the fourth well (SDX-4) on Shah Deniz Field led to the postponement of the beginning of the realization of Stage-2 of the large-scale project until 2013.

Earlier the representatives of the consortium on Shah Deniz field development expected the realization of the Stage-2 to begin in 2011.

"We were expecting receiving results from the wells [SDX-4] in December 2006," StatoilHydro's representative said.

The concluding commissioning for SDX-4 on Shah Deniz field is expected to complete by September. According to the information by the State Oil Company of Azerbaijan (SOCAR) which is a part of the project, the well has provided an opportunity to increase the reserves on the field by percent up to 1.2 trln cu.m.

The annual gas production in stage-2 is expected up to 20-21bln cu.m per year. The production peak will take place in 2015. According to StatoilHydro, the cost of the realization of Stage-2 may cost up to $10bln.

"We already must be concentrating on acquiring contracts on sale-purchase and on gas transportation by 2013", StatoilHydro's representative said.

The partners on Shah Deniz project's Stage 2 hope to sell the gas of the field to Azerbaijan, Georgia, Turkey, Greece, Italy and other countries.

Due to the possibility of transporting gas from Azerbaijan to Europe, StatoilHydro's representative said that the Nabucco project is one of the gas export solutions.

"There are other projects including Turkey-Greece-Albania-Italy gas pipeline," StatoilHydro's representative said.

Currently the partners of the Stage-1 are selling gas from the field only to Azerbaijan, Georgia and Turkey.

1.5bln cu.m of gas is planned to be sold to Turkey and 0.3bln cu.m to Georgia be the end of 2007.

Gas production on the Shah Deniz field in 2007 is expected to total 2.8bln cu.m. Nearly 7bln cu.m of gas is expected to be produced on the field in 2008. The peak of the gas production within Stage-1 is forecasted to take place in 2009 (8.9bln cu.m).

The contract on development of off-shore Shah Deniz field was signed on 4 June 1996. The sides to the contract are ВР (operator - 25.5%), Statoil (25.5%), SOCAR (10%), LukAgip (10%), NIOC (10%), Total (10%), and TPAO (9%).