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BP Starts-Up Shah Deniz 2 Development in Azerbaijan

Credit: BP
Credit: BP

By MarEx 2018-07-02 22:08:20

BP has announced the start-up of the Shah Deniz 2 gas development in Azerbaijan, including its first commercial gas delivery to Turkey.

The BP-operated $28 billion project is the first subsea development in the Caspian Sea and the largest subsea infrastructure operated by BP worldwide. It is also the starting point for the Southern Gas Corridor series of pipelines that will for the first time deliver natural gas from the Caspian Sea direct to European markets.

Shah Deniz 2 is BP’s largest new upstream project in 2018, and, following Atoll in Egypt, is the second of six project start-ups expected for the year. This string of developments will follow from 2017’s seven major project completions and is key to delivering the 900,000 barrels of oil equivalent new production that BP expects from new upstream major projects by 2021.

At plateau, Shah Deniz 2 is expected to produce 16 billion cubic meters of gas per year (bcma) incrementally to current Shah Deniz production. Together with output from the first phase of development, total production from the Shah Deniz field will be up to 26 bcma of gas and up to 120,000 barrels of condensate a day.

Offshore, the Shah Deniz 2 project includes 26 subsea wells, 500 kilometers (310 miles) of subsea pipelines and flowlines and two new bridge-linked platforms. Gas is transported onshore through an 85-kilometer (53-mile) pipeline to the Sangachal terminal near Baku, which underwent a major expansion to accommodate the new increased gas output. The project also includes the new South Caucasus pipeline expansion, 428 kilometers (267 miles) of new pipeline in Azerbaijan and 59 kilometers (37 miles) in Georgia, carrying Shah Deniz gas to Turkey.

The development is a major milestone in the creation of the new Southern Gas Corridor which, once completed, will transport Caspian gas directly into the heart of European markets for the first time. From the South Caucasus pipeline, gas is transported across Turkey through the new Trans-Anatolian Pipeline (TANAP), which was inaugurated earlier this year, and, when complete, the Trans-Adriatic Pipeline (TAP) will then supply gas as far as Greece, Albania and Italy. Commercial deliveries to Europe are expected to commence in 2020.

Shah Deniz, located in the Caspian Sea offshore Azerbaijan, is the largest gas discovery ever made by BP. Discovered in 1999, the giant field was estimated to hold approximately one trillion cubic meters of gas and covers approximately 860 square kilometers, roughly the same size and shape of Manhattan Island. The first phase of field development, Shah Deniz 1, began production in 2006 and currently supplies gas to Azerbaijan, Georgia and Turkey.

At peak, the Shah Deniz 2 development, which was sanctioned in 2013, supported more than 30,000 jobs in Azerbaijan and Georgia and in total included over 180 million hours of work.

The Shah Deniz consortium is: BP, 28.8 percent - operator; TPAO,19 percent; Petronas,15.5 percent; AzSD, 10.0 percent; SGC Upstream, 6.7 percent; Lukoil,10 percent; and NICO,10 percent.