BP announces new Shah Deniz Stage 2 project development phase
Azerbaijan, Baku, April 17 / Trend A.Badalova/
The consortium of Azerbaijani Shah Deniz gas condensate field development approved the decision to commence Front End Engineering and Design (FEED) on the estimated $25 billion Shah Deniz Stage 2 project, BP reported on Tuesday.
This was officially announced in Baku today during the meeting between the President of Azerbaijan Ilham Aliyev and Bob Dudley, Group Chief Executive of BP, the Operator of Shah Deniz, who is on a working visit to Azerbaijan.
Achieving this important milestone allows the consortium to maintain its target for first gas exports around the end of 2017.
Gas to be produced during the second stage of Shah Deniz field development is considered as the main source for all Southern Gas Corridor projects, which are designed to transport Azrbaijani gas to the European markets. Azerbaijan is going to transport 10 billion cubic meters per year to Europe within the Shah Deniz Stage 2 project.
The Shah Deniz 2 project is set to produce 16 billion cubic metres of gas per year.
The entry into FEED represents the start of a key phase in the project during which engineering studies will be refined, further wells will be drilled, commercial agreements will be finalised and key construction contracts will commence, BP said.
During the FEED phase of the project, the Shah Deniz consortium will finalise its selection of export routes across Turkey and into Europe.
According to the President of the Azerbaijan, Georgia and Turkey Region of BP, Rashid Javanshir over the past two years a substantial progress on all the individual components of this mega-project has been made.
"Engineering studies, commercial agreements and the support of the State of Azerbaijan and other governments give the Shah Deniz consortium the confidence to embark upon this FEED phase," he said.
He added that with over 30 trillion cubic feet of gas resources, Shah Deniz is truly a giant field. "And with more than 26 wells, two new platforms, a terminal expansion and up to 4000km of new pipelines to Europe, this chain of major projects represent one of the largest oil and gas developments in the world,' Javanshir said.
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 Caspian, is expected to include two new bridge-linked production platforms; 26 subsea wells to be drilled with 2 semi-submersible rigs; 500 km of subsea pipelines built at up to 550m of water depth; a 16 bcma upgrade for the South Caucasus Pipeline (SCP); and expansion of the Sangachal Terminal. Further pipelines will be built and expanded to transport Shah Deniz gas through Turkey and Europe.