SOCAR inks major contract within modernization of Baku Refinery
Azerbaijan's state oil company SOCAR has signed an EPC (engineering, procurement and construction) with Italy's Maire Tecnimont for the construction of new facilities as part of the reconstruction and modernization of Heydar Aliyev Baku Oil Refinery, said a message from SOCAR.
SOCAR proceeds with the revamp of the Heydar Aliyev Oil Refinery with the objective of advancing the quality of fuel and lubricants in Azerbaijan and increasing the volume of production, said the message.
"The tender for the construction of new units was announced on February 10, 2017. Five international companies participated in the selection process. The subsidiaries of Maire Tecnimont S.p.A. - Tecnimont S.p.A. and KT-Kinetics Technology S.p.A. were selected with the highest score for the construction of new facilities. The deal includes the construction of more than 10 new production units. The tender for the reconstruction of existing units has been granted to Técnicas Reunidas, which won the qualifying proceedings last December," said the company.
The contract was signed by Elman Ismayilov, CEO of Heydar Aliyev Refinery and Pierroberto Folgiero, CEO Maire Tecnimont.
Italian media reports that the contact's cost is estimated at $800 million.
The cost of the refinery's modernization will stand at around $1.5-$1.7 billion, according to preliminary estimates.
The refinery's processing capacity will be increased from 6 to 7.5 million tons of oil per year following the modernization.
Time set for starting drilling at Azerbaijan’s Absheron field
No delay is expected in starting the drilling of first well at Azerbaijan's Absheron gas field in the Caspian Sea, an informed source in Azerbaijan's oil and gas market told Trend.
The source noted that the floating drilling rig named after Heydar Aliyev is completing the preparations for sail away to the place of drilling in the field.
"Rig sail away is planned between 8th and 15th February (weather permitting). No more delay is expected," said the source.
Earlier, Azerbaijan's state oil company SOCAR and TOTAL signed a framework agreement on the main contractual and commercial principles regulating the program of the first phase of Absheron field's development.
The first phase of the field's development envisages drilling of one well at a sea depth of 450 meters. The production will stand at up to 1.5 billion cubic meters of gas per year and these volumes, coupled with considerable amount of condensate will be used in Azerbaijan's domestic market. In the second phase, it is planned to produce up to 4 billion cubic meters of gas per year.
TOTAL specialists estimate the reserve of Absheron field to stand at 326 billion cubic meters of gas and 108 million tons of condensate.
JOCAP, with 50 percent share held by SOCAR and TOTAL each, will be the operator of Absheron project.
Azerbaijan among most successful countries in implementation of UK oil and gas programme: report
The UK Government allocated some £1.3 billion worth of funds within a framework of implementation of Oil & Gas High Value Campaign (HVC) in Azerbaijan in 2016-2017.
The data was provided in the renewed "Overseas Business Risk - Azerbaijan" report of the Department for International Trade of the UK Government (DIT), which is aimed at providing the businesses willing to operate in Azerbaijan with necessary information.
The HVC programme identifies large scale overseas projects and aims to provide an intensive level of support to help UK businesses win contracts in and around these opportunities.
The report noted that oil and gas is by far the largest sector in Azerbaijan and therefore currently attracts the most DIT attention.
"Azerbaijan is the second most successful country where DIT HVC is implemented," the report said.
Since October 2015, to support the HVC, DIT, together with the Ministry of Economy, BP and SOCAR, runs the UK/Azerbaijan Partnership Programme to promote and support collaboration between UK and Azerbaijani companies in the oil and gas sector.
To date, this Programme has been responsible for some 65 partnerships and is set to continue for the next 3 to 5 years.
The report touches on the current partnership between BP and the Government of Azerbaijan. On Sep. 14, 2017, BP, together with SOCAR, signed the extension of the Azeri Chirag Guneshli PSA Agreement until 2050. This agreement will lead to significant new business in the oil and gas sector in Azerbaijan for resident and new UK companies. Other major contracts are in the pipeline.
Outside of oil and gas, DIT is looking to diversify into other sectors including healthcare, mining, renewable energy, agri-business, tourism and education.
According to the State Customs Committee of Azerbaijan the trade turnover with the UK reached $281.1 million last year. Export of Azeri goods to the UK grossed to $41.2 million for the covered period.
SOCAR, TOTAL discussing one more Azerbaijani gas project
Azerbaijan's state oil company SOCAR and French TOTAL are discussing the possible participation of the latter in the project for development of Azerbaijan's Umid-Babek block of gas fields, an informed source in Azerbaijan's oil and gas market told Trend.
The source noted that the sides are progressing with discussions on this issue.
"A meeting took place between TOTAL CEO Patrick Pouyanne and SOCAR President Rovnag Abdullayev during the World Economic Forum in Davos and some principles were agreed for a possible farm-in," said the source.
It was earlier reported that the decision on TOTAL's possible participation in the project will be made in 2018.
TOTAL is the participant and technical operator of development of Absheron gas field in Azerbaijan.
SOCAR announced the discovery of Umid field in 2010.
The risk service contract (a contract with a minimum guarantee of compensation) for exploration and development of an offshore block including the Umid gas field and the promising Babek structure in the Caspian Sea was signed between SOCAR and SOCAR Umid Oil and Gas Ltd on January 12, 2017.
According to SOCAR's data and the results of drilling of the first exploration well, the volume of the field reserves reach over 200 billion cubic meters of gas and 40 million tons of condensate.
Umid field is located 75 kilometers from Baku.
The reserve of Babek structure may stand at 400 billion cubic meters of gas and 80 million tons of condensate, according to preliminary data.
TANAP gas pipeline begins line fill - SOCAR
The Southern Gas Corridor project, which envisages transportation of Azerbaijani gas to Europe is expected to start up this summer, said Vitaly Baylarbayov, deputy vice president for investments and marketing at Azerbaijan's state oil company SOCAR.
After years of planning, the $40 billion Southern Gas Corridor (SGC) backed by the EU to ease its reliance on Russia is set to start up on time this summer as line fill began just "days ago" in the TANAP pipeline across Turkey, he said addressing the European Gas Conference in Vienna.
"We can proudly say that the Southern Gas Corridor will be inaugurated in 2018 and in the summer of 2018 the gas will start going to the SGC first into Turkey and then in 2020 to Europe," he noted.
On the upstream side, Baylarbayov said activity continues at the Shah Deniz Phase 2 offshore development, but the wells needed for production start-up have already been drilled.
Further, he pointed out that the TANAP pipeline is more than 91 percent complete and the Trans-Adriatic Pipeline (TAP) is 65 percent built.
After delivering first gas from Azerbaijan, Georgia and Turkey this year, TANAP will ramp up deliveries to Turkey to the contracted 6 billion cubic meters per year by 2020, said Baylarbayov.
He noted that TAP will supply first gas to Greece in 2020, after which it will gradually ramp up deliveries to 10 billion cubic meters per year, including around 8.5 billion cubic meters per year for Italy, 1 billion cubic meters per year for Greece and 1 billion cubic meters per year for Bulgaria.
Bulgaria should receive gas via the Interconnector Greece-Bulgaria, which is expected to be built by 2020, he said, adding that to cover the supplies, production at Shah Deniz Phase 2 is expected to reach its 16 billion cubic meters per year peak by 2024-25, or maybe earlier.
The Southern Gas Corridor, worth $41.5 billion, is considered as one of the priority energy projects for the EU, which strives for diversification of gas supplies. The project envisages the transportation of gas from the Caspian region to the European countries through Georgia and Turkey.
At the initial stage, the gas to be produced as part of the Stage 2 of development of Azerbaijan's Shah Deniz field is considered as the main source for the Southern Gas Corridor projects. Other sources can also connect to this project at a later stage.
As part of the Stage 2 of the Shah Deniz development, the gas will be exported to Turkey and European markets by expanding the South Caucasus Pipeline and the construction of Trans Anatolian Natural Gas Pipeline and Trans Adriatic Pipeline.
The first gas within the Shah Deniz-2 project will be delivered to Turkey in 2018, and to Europe in 2019.
Operator for Azerbaijan’s Absheron field to be created soon
The process of creation of the joint JOCAP company by French TOTAL and Azerbaijan's state oil company SOCAR for developing Azerbaijan's large gas field Absheron in the Caspian Sea will soon be completed, a source in the country's oil and gas market told Trend.
The source noted that it will take few weeks to complete the registering process of the company.
"JOCAP registering process is ongoing. It should take few weeks from now. Creation will be soon completed," added the source.
Earlier, Azerbaijan's state oil company SOCAR and TOTAL signed a framework agreement on the main contractual and commercial principles regulating the program of the first phase of Absheron field's development.
The first phase of the field's development envisages drilling of one well at a sea depth of 450 meters. The production will stand at up to 1.5 billion cubic meters of gas per year and these volumes, coupled with considerable amount of condensate will be used in Azerbaijan's domestic market. In the second phase, it is planned to produce up to 4 billion cubic meters of gas per year.
TOTAL specialists estimate the reserve of Absheron field to stand at 326 billion cubic meters of gas and 108 million tons of condensate.
JOCAP, with 50 percent share held by SOCAR and TOTAL each, will be the operator of Absheron project.