BAKU, Azerbaijan, Sept.14
By Leman Zeynalova – Trend:
Update on work schedule for Azerbaijan’s Umid field
It is planned to get first gas from Umid-2 platform in Azerbaijan in 2025, while previously, it was scheduled for 2022, a source familiar with the matter told Trend.
Work on construction of the platform has started, however, the commissioning process is delaying, noted the source.
Moreover, the source said the well #18 that is being drilled from Umid-1 platform will be put into operation in the first quarter of 2021.
TAP details test gas supplies from Azerbaijan to Europe
In preparation for the start of commercial operation and as part of the testing and commissioning phase, the Trans Adriatic Pipeline (TAP) has been filled with natural gas from the Greek-Turkish border up to the compressor station in Fier, Albania, Vugar Veysalov, TAP Head of External Affairs, told Trend.
“The testing and commissioning of the offshore and Italian sections will take place in line with the project schedule to start to become operational and be ready to transport first Shah Deniz II gas in the fourth quarter of 2020,” he said.
Azerbaijan’s Bulla Deniz field to have 5 new platforms by 2025
It is planned to install five new platforms and 26 wells at Azerbaijan’s Bulla Deniz field from 2016 through 2025, Trend reports with reference to Azerbaijan’s state oil company SOCAR.
“The platform #12 was put into operation at Bulla Deniz in 2018 and it is planned to drill one exploration and four development wells from this platform. The average depth of the wells to be drilled will be 6,300 meter. Drilling at this depth is conducted under a high pressure and is considered a complex project from the technological point of view. As a result of applying high technological standards, SOCAR has already achieved positive results at similar fields and will use this experience at this field as well,” reads a report released by SOCAR.
“The company has installed ZJ-70DBS drilling rig meeting the modern standards to conduct drilling. This rig is able to drill wells to a depth of up to 7,000 meters. Currently, construction of the platform #18 is underway, wherefrom it is planned to drill five wells.”
SOCAR points to prospects for direct trade with Afghanistan
There are prospects for direct trade relations with Afghanistan, Ibrahim Ahmadov, deputy head of the public relations and events department at Azerbaijan’s state oil company SOCAR told Trend.
“During recent meetings with SOCAR leadership, high-ranking representatives of Afghan government expressed a desire to buy oil products directly from SOCAR. They noted that our oil products are delivered to Afghanistan by dealers and sometimes, by smugglers, which negatively affects the control over the quality of the products. I believe there are prospects for direct trade with Afghanistan in the future. In this case, it is highly likely that our products will be delivered to Afghanistan with the same quality as in the Heydar Aliyev Oil Refinery,” he said.
In response to a question regarding Afghan media reports about alleged delivery of 60 tankers of low-quality gas from Azerbaijan to Afghanistan, Ahmadov noted that the Heydar Aliyev Oil Refinery produces the major part of the liquefied petroleum gas (LPG) in Azerbaijan.
“In accordance with the production standard of 20448-2018, butane content of the product should be no lower than 60 percent. Our LPG has 75 percent butane content. However, SOCAR is not engaged in the export of this product. We sell gas to «MaishatMayeQaz MMC» firm, which sells it in the country and abroad. As far as I know, this firm doesn’t directly export products to Afghanistan either. The products are delivered there by other dealers,” he said.
As for the quality level described by the Afghan media, Ahmadov noted that the product with such a content can’t be produced at SOCAR’s refinery.
“LPG with zero butane content wouldn’t simply work due to the lack of the flammable substance and domestic consumers would notice that. Since the information spread by Afghan media is not complete, it is still unclear what was the content of this product. The product must be transported in pressurized sealed tanks as it is subject to evaporation. We do not know in what conditions the product was transported and what happened to it on the way or when passing from hand to hand between trading companies,” Ahmadov added.
DESFA announces schedule of TAP’s interconnection with national natural gas transmission system
Greek DESFA National Natural Gas System Operator S.A. has published the 5th Revision of the National Natural Gas Transmission System (NNGTS) Maintenance Program for the Year 2020, Trend reports citing DESFA.
According to this document, connection to the national natural gas transmission system (NNGTS) of the Metering/Regulating Station (U6910) at the Interconnection Point between the DESFA and TAP networks at Nea Messimvria will take six working days from October 13 through October 20 and three working days from October 27 through October 30.
Siemens: All required sales are in place in Azerbaijan
All required sales are in place in Azerbaijan, Germany-based Siemens company told Trend.
“Azerbaijan government has decided not to stop or postpone infrastructure projects for the quarantine period, which means all required sales and after sales activities are in place,” said the company.
“For the product business for the high voltage transmission business as well as spare part and service for the gas and power generation, we are working with such companies as Azerenerji JSC, Bakelektro, Azelko, Elektra, ImaEnergy, and others. We try to combine remote and office work, but what is really we missing now is eye to eye meetings with our customers.Now we enjoy the opportunities opened by remote communication technologies.”
Preparations for Karabagh project offshore works well advanced
A number of large companies and organizations are engaged in the offshore works as part of Azerbaijan’s Karabagh project, Trend reports with reference to BOS Shelf, which has constructed the jacket for the field.
These companies include SOCAR’s Oil and Gas Research and Design Institute, Oil and Gas Construction Trust, BOS Shelf, ASCO, Global Maritime, as well as the project customer Karabagh Operating Company (KOC).
A fleet of 26 vessels will be engaged in the works for transportation and installation of the jacket. The fleet also includes unique DBA and STB1 vessels. Currently, all of the vessels are undergoing certification and main equipment testing. Moreover, the main crane on the DBA vessel will be recertified in order to increase its lifting capacity to 1,250 tons.
One of the important elements of the jacket installation is the Hydraulic Pile Hammer, which is currently used BP for the ACE project, and from mid-September 2020 will be handed over to KOC.
Oil and Gas Construction Trust and Global Maritime are currently also conducting final checks of all project procedures and their compliance with international standards, training of all personnel involved in the project, mobilization of all necessary equipment and materials, with the involvement of highly specialized contractors, including divers, operators and demolition personnel. According to the plan, after the jacket is lowered into the sea, the process of installing the jacket in the field will begin. It will take from 400 to 450 days.
EIA reveals forecasts for Azerbaijan’s oil output
Azerbaijan’s petroleum and other liquids production will stand at 0.71 million barrels per day in 2020, as compared to 0.78 million barrels per day in 2019, the US Energy Information Administration (EIA) said in its September Short-term Energy Outlook (STEO), Trend reports.
The country produced 0.77 million barrels per day and 0.70 million barrels per day in the first and second quarter of 2020, respectively.
The expected output for the third and fourth quarter is 0.67 million barrels per day and 0.70 million barrels per day, respectively.
EIA forecasts that petroleum and other liquids production in Azerbaijan will rise in 2021 to stand at 0.74 million barrels per day.
The expected production volume for the first and second quarters of 2021 is 0.72 million barrels per day and 0.74 million barrels per day, respectively and 0.75 million barrels per day for the third and fourth quarters each.
SOCAR-UNDP NAMA program period extended
As of September 2020, Nationally Appropriate Mitigation Actions (NAMA) project of the United Nations Development Programme (UNDP) and Azerbaijan’s state oil company SOCAR has been extended for four months until December 31, 2020, UNDP told Trend.
“Although we achieved a lot over the last five years, the NAMA project, also known as Nationally Appropriate Mitigation Actions, has faced a range of challenges due to the coronavirus outbreak in the country. Since March we planned to host two workshops that would bring specialists in energy efficiency in buildings, transport and associated gas capturing from oil wells to summarize the outcomes of our project and make suggestions on the further steps regarding the matter. However, unfortunately, neither workshops nor other pending activities had a chance to be finalized.
“In this regard, after much thought and consideration, the UNDP decided to extend the NAMA project up to the 31st of December 2020.
“Presently, there are no changes in the extended version of the project and all the activities will continue to be implemented as per Project Document, said UNDP.
NAMA achieved 35 percent energy savings in pilot buildings over the past five years.
Moreover, during this period, 8-10 percent fuel consumption saving was achieved by pilot transportation activities, capturing of 4.6 million cubic meters of methane gas emissions per year, all of which contribute to the prevention of negative impacts of climate change, said UNDP.
“In this regard in order to further disseminate the positive results of the project and to raise awareness on enhancing the role of energy efficiency (EE) measures and alternative energy in the country, the project team organized a "Webinar on Awareness raising in EE in Buildings and Transportation" within the framework of a #GreenEnergy contest. The webinar was attended by officials from ministries, SOCAR and UNDP, as well as the participants of the contest.
“In addition, various local and international experts took part in the webinar presenting experience they gained regarding energy-efficient, as well as cutting-edge technologies that could be applied to enhance the role of energy efficiency measures in Azerbaijan.”
NAMA project helps to reduce methane emissions in Azerbaijan’s onshore oil fields by 20 percent.
“The results of collecting associated gas from oil wells instead of flaring it are outstanding. We have installed a new advanced associated gas capturing technology, which is set to reduce methane emissions in onshore oil production fields in Azerbaijan by 20 percent. The installed cutting edge compressors and separators have been helping to collect associated gas during oil production and distribute it to around 12 villages in Siyazan, a mountainous area of northern Azerbaijan, whose population had previously no access to clean fuels.
“The new gas capturing technologies have made it possible to deliver annually 7 million cubic meters of gas, including 4.6 million cubic meters of methane previously vented into the atmosphere, to the locals, as well as prevent deforestation caused by nearby communities’ dependency on wood for heating and cooking amid the lack of natural gas,” said the UNDP.
Opening of new compressor stations could be expected during the replication stage of the NAMA project.
“NAMA project reflects innovative approaches that have made a huge contribution to greenhouse gas mitigation through a range of energy efficiency upgrades. Thus, within the project, a range of energy-efficient innovative measures have been implemented in SOCAR administrative and service buildings in Garadag, Gala settlements and Sumgayit with total floor area of 10 thousand square meters, including the installation of six Wind Turbines with 24 kW of total installed capacity and Solar PV Panels with a total capacity of 63 kW in order to provide the facilities with economically efficient and eco-friendly energy.
“Among the measures taken under the NAMA project, the SOCAR's Transportation Fleet has been equipped with the ECO-driving simulator, an eco-friendly solution to reduce fuel consumption and operative costs. Adapted to the road infrastructure, traffic regulations and climatic conditions of Azerbaijan, the simulator has an opportunity to train annually up to 1,000 drivers of cars, buses and trucks, making it possible to reduce the emissions of carbon dioxide into the atmosphere. According to the calculations of the training results, economic, ecological and safe driving skills can save annually approximately 600.000 litters of fuel, or 5 percent of total used fuel for SOCAR.
“Three compressor stations were established and connected to SOCAR infrastructure for delivering collected associated gas to the population of nearby villages. At this point, there are no plans of opening additional new compressor stations. However, since NAMA being a pilot project envisages replication of its achievements to SOCAR and in further future to the whole country, opening of new compressor stations could be expected during the project’s replication stage.
“The main focus of our project is on the introduction of energy saving practices. Thus, we would rather use this term, stating that the project helped to achieve energy saving estimated as 5,890,725 kW/hour/year, which corresponds to 515.185 tonnes of oil equivalent (TOE), according to the latest data,” said UNDP.
SOCAR eyes to grow its naphtha, LNG divisions
SOCAR Trading has returned to expansion mode, aims to increase its presence in liquefied natural gas (LNG) and U.S. crude, Mariam Almaszade CEO of SOCAR Trading, said, Trend reports.
The expansion follows the firm’s reorganization two years ago and strong results for the first half of 2020, Almaszade told Reuters.
Almaszade said the Geneva-based trader had hit its full-year profit target in the first half of the year. The company was able to balance clearing oil produced by parent company SOCAR and take advantage of the volatility in the market in recent months due to the COVID-19 crisis.
Almaszade explained how the group was able to beat the mad scramble to sell its crude in late March. “We saw the depression starting in the Mediterranean, and so we diverted our crude and almost all our Azeri light went to Asia in March,” she said.
“We have a global crude desk now, it was all merged. We hired a few more North Sea traders after cutting back substantially,” Almaszade said. “We still have a U.S. office and we’re looking to reinvent it.”
She had planned to hire more traders in the U.S. expansion earlier this year but the COVID-19 pandemic forced the firm to delay its plans.
Along with rebuilding the U.S. desk, SOCAR wants to grow its naphtha and LNG divisions next year, develop light ends trading and move more into southern and eastern European gas trading, the chief trading officer explained.
“Chinese imports are dominated by Chinese majors. We tried to establish a presence in China but we realized there was substantial competition, very thin profit margins and credit issues,” Ahmadzada said.
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