BAKU, Azerbaijan, July 27
By Leman Zeynalova - Trend:
Given the fact that the Shah Deniz 1 field in Azerbaijan (first phase for development of Shah Deniz gas and condensate field) started producing in late 2006 and reached its plateau level in 2010, the field’s geological tail-off period should begin in 2024–2026, Trend reports with reference to the the book titled “The Southern Gas Corridor and its importance for South-East Europe”.
During the tail-off period, production levels may decrease by around 2 bcm/year or more, depending on well productivity, the authors believe.
“This leads us to assume that there might not be sufficient gas to extend the long-term contract with the Turkish BOTAŞ, which expires in 2021, to provide 6.6 bcm/year on a long-term contract (LTC) basis. Any remaining volume from the tail-off period may either be purchased by SOCAR for the domestic market and/or export; or a short-term contract might be signed with reduced volume of gas for export from Phase 1,” reads the book.
Another scenario is that the remaining volume from SD1 could be added on top of the contracted 6 bcm/year of SD2 gas. Realization of this scenario will strongly depend on whether both seller and buyer would be interested financially and legally in the exchange of SD1 volumes under the SD2 contract.
In the event that the contract with BOTAŞ is not extended and SOCAR receives the remaining volume from SD1, SOCAR may have from 3 to 5 bcm/year of additional gas, with a gradual decrease year-by-year from 2025 on.
Shah Deniz Stage 1 began operations in 2006. It has the capacity to produce around 10 billion cubic meters of gas per annum (bcma) and approximately 50,000 barrels a day of condensate.
Despite the complexities of drilling the wells, building a platform, constructing an onshore terminal and laying a 700 km South Caucasus pipeline (SCP) through Azerbaijan and Georgia to the Turkish border, Shah Deniz Stage 1 was developed in only seven years. Since Shah Deniz has proved a secure and reliable supplier of gas to Azerbaijan, Georgia and Turkey.
During 2014, the existing Shah Deniz facilities were further de-bottlenecked which increased their production capacity from 27.3 million standard cubic metres to 29.5 million standard cubic metres of gas per day.
In 2018, Shah Deniz celebrated 100 billion cubic metres of total gas production from the field since the start of operations. The milestone was achieved at the end of December, exactly 12 years after the first announcement of the start-up of commercial gas production from the field and start-up of operations of the South Caucasus Pipeline.
In the first three months of 2020, the field produced around 4.7 billion standard cubic metres (bcm) of gas and 1 million tonnes (7.7 million barrels) of condensate in total from the Shah Deniz Alpha and Shah Deniz Bravo platforms.
Production from ShahDeniz Bravo has been ramping up since the first gas delivery at the end of July 2018 gas per day or more than 20 bcma.
The existing Shah Deniz facilities’ production capacity is currently over 56 million standard cubic metres of gas per day or more than 20 bcma.
---
Follow the author on Twitter:@Lyaman_Zeyn