...

Capital expenditures on South Caucasus Gas Pipeline exceed $ 300 million

Oil&Gas Materials 15 August 2014 14:11 (UTC +04:00)

Baku, Azerbaijan, Aug. 15

By Emil Ismayilov - Trend:

During the first half of 2014, the South Caucasus Pipeline (SCP) spent $22.4 million in operating expenditure and $325 million in capital expenditure, according to BP report as of Jan.-June 2014.

For the full year, operating expenditure is expected to be $50 million which is similar with 2013.

As a result of the ramp-up in the SCP expansion, capital expenditure will increase to $1,250 million compared to $250 million in 2013, according to the report.

The final investment decision was made on the second phase of the Azerbaijani Shah Deniz offshore gas and condensate field's development on December 17, 2013.

The total cost of the Shah Deniz 2 project, including SCP expansion, will be approximately $28 billion.

The first shipment of line pipe is expected to arrive in Azerbaijan later this year, according to the report.

The length of the Baku-Tbilisi-Erzurum (South Caucasus gas pipeline) is over 700 km. Gas produced from the Shah Deniz field in the Azerbaijani sector of the Caspian Sea is transported via the pipeline. The gas is supplied to Georgia and Turkey. Azerbaijan also is a buyer of gas.

In late June, the consortium for the development of the Azerbaijani Shah Deniz field chose the Trans Adriatic Pipeline (TAP) as a route for transporting its gas to European markets.
The gas to be produced within the second phase of this field's development will be the main source for TAP.

Two offshore platforms will be installed and over 20 subsea wells drilled as part of the Shah Deniz 2 in order to produce an additional 16 billion cubic meters of gas per year.

The forecasts show that the gas production will exceed 24 billion cubic meters per year within the second stage of the field's development.

Shah Deniz reserves are estimated at 1.2 trillion cubic meters of gas. The contract to develop the offshore Shah Deniz field was signed on June 4, 1996.

The SCP Co. shareholders are: 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. Total has entered into an agreement to sell its 10% interest in Shah Deniz to TPAO.

After the transaction is over, the share of the latter in the project will be 19 percent.

Tags:
Latest

Latest