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Partners on Shah Deniz project begin negotiations with potential gas buyers from second stage of development

Oil&Gas Materials 4 August 2010 19:40 (UTC +04:00)

Azerbaijan, Baku, August 4 /Trend, A.Badalova/

The partners of the project on development of Azerbaijani Shah Deniz gas and condensate field plan to begin bilateral negotiations with potential buyers of gas from the second stage of development of the project, Rannveig S. Stangeland, Vice President Communication of Statoil Company, wrote in an e-mail to Trend on August 4.

"We are planning bilateral negotiations with potential customers [gas buyers from the second stage of shah Deniz], not a tender process," said Stangeland.  

A number of potential customers have been prequalified and negotiations will be initiated in a short while. The gas volumes up for sale are in the range of 10 billion cubic metres per year, Statoil representative said.

"We will negotiate with a broad spectrum of potential buyers including three potential pipeline projects," said Stangeland.

He did not specify the name of pipeline projects. However, currently as priorities, it is considered to supply gas from Shah Deniz via the South Energy Corridor to Europe. In this corridor, it is expected to pave the Nabucco Pipeline, ITGI and Trans-Adriatic Pipeline.
Azerbaijani Shah Deniz is one of the largest in the world. Its reserves are estimated at 1.2 trillion cubic meters of gas.
It is expected to receive 7.84 billion cubic meters in the field this year, peak production forecasted at over 8.6-9 billion cubic meters. It is planned that in the second stage of field development, gas production can be brought up to 20 billion cubic meters a year. Now gas is transported to Georgia and Turkey via the South Caucasus gas pipeline.

According to forecasts, at the second stage of field's development, gas production will be increased to 25 million cubic meters per year.

The contract to develop the offshore Shah Deniz field was signed June 4, 1996. Participants to the agreement are: BP (operator) - 25.5 percent, Statoil Hydro - 25.5 percent, NICO - 10 percent, Total - 10 percent, LukAgip - 10 percent, TPAO - 9 percent, SOCAR-10 percent.

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