British Petroleum has awarded $9.6bn to contractors for Shah Deniz 2 project, according to the head of BP Azerbaijan, Trend news agency has reported.
The head of BP Azerbaijan, Gordon Birrell, told reporters on Wednesday that the total expenditure for Shah Deniz 2 is expected to reach about $4.5bn in 2014, with much of that amount to be spent with companies that have a local partner.
“The objective is to deliver first gas from Shah Deniz 2 into the Southern Gas Corridor in 2018,” said Birrell. “We have just finished drilling the fifth production well offshore,” he said, adding that the project will extend for over a five- year period.
The total annual production of gas from the Shah Deniz project will increase from 9bn cubic meters in the first phase by an additional 16bn cubic meters in the second phase. The project will include the installation of two offshore platforms and the drilling of more than 20 underwater wells will be drilled for additional production of 16bn cubic meters of gas per year under the Shah Deniz 2.
The gas, produced from stage 2 of the field’s development will be exported to Turkey and to the European markets by means of expanding the South Caucasus Pipeline, the Trans-Anatolian Gas Pipeline (TANAP) and the Trans-Adriatic Pipeline (TAP).
The Shah Deniz offshore field has proven reserve of 1.2 trillion cubic meters of gas. In 2013, Shah Deniz produced 9.8bn cubic meters of gas and 2.48mn metric tonnes of condensate – the equivalent of 19.6mn barrels – against 7.73bn cubic meters of gas and 2mn metric tons of condensate in 2012.
Shareholders in Shah Deniz are: BP which own 28.8%, Statoil with 15.5%, NICO, Total and Lukoil – 10% each, followed by TPAO with 9% and SOCAR with 16.7%. Â This also includes the recent purchase by BP and SOCAR which acquired shares from Statoil.Â
Earlier, Total has entered into an agreement to sell its 10% interest in Shah Deniz to TPAO, raising its share 19%.
Statoil’s interest of 15.5% in the Shah Deniz project was recently bought by the Malaysian oil and gas company Petronas, but the transaction is yet to be closed.
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