Fircroft: BP starts-up Shah Deniz 2 project in Azerbaijan

BP has this week announced the start-up of the landmark Shah Deniz 2 project in Azerbaijan along with its first commercial gas delivery to Turkey. Shah Deniz 2 is BP’s largest new upstream project in 2018 and is the second of six project start-ups expected for the year from the British multinational oil and gas company.

The Shah Deniz 2 pipeline which will connect the Caspian Sea with Europe.
(The Shah Deniz 2 pipeline. Image via BP).

The $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 deliver natural gas from the Caspian Sea to Europe.

At its peak, Shah Deniz 2 is expected to produce 16 billion cubic metres of gas per year (bcma) incrementally to current Shah Deniz production. Together with an 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, 500km of subsea pipelines and flowlines and two new bridge-linked platforms. Gas is transported onshore through an 85km 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 – 428km of new pipeline in Azerbaijan and 59km in Georgia, including two new compressor stations- carrying Shah Deniz gas to Turkey.

The Sangachal Terminal near Baku- part of the Shah Deniz 2 project.
(The Sangachal Terminal near Baku- part of the Shah Deniz 2 project. Image via BP).

Commenting on the start-up of Shah Deniz 2, Bob Dudley, BP group chief executive, said:

“Shah Deniz 2 is one of the biggest and most complex new energy projects anywhere in the world, comprising major offshore, onshore and pipeline developments. BP and our partners have safely and successfully delivered this multi-dimensional project as designed, on time and on budget.”

“Together with the Southern Gas Corridor pipeline system, Shah Deniz 2 will deliver significant new energy supplies to Europe, further diversifying its sources of energy and providing new supplies of natural gas which will be essential in the energy transition.”

“This milestone achievement is a credit to the Shah Deniz partners and to our close co-operation with the governments of Azerbaijan, Georgia, and Turkey, building on the relationships BP has built in the region over more than 25 years.”

The Shah Deniz Bravo platform in the Caspian Sea.
(The Shah Deniz Bravo platform in the Caspian Sea. Image via BP).

From the Caspian to Europe

The Shah Deniz 2 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 month, 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.

BP’s chief executive, Upstream, Bernard Looney, commented on how efficiently the project was brought online, saying:

“Bringing this huge project online within the schedule and budget we set out at sanction 4 ½ years ago is further evidence of our focus on efficient and disciplined project execution. As our largest start-up for the year, Shah Deniz 2 is also a very important milestone in delivering our plans for growth, including from our pipeline of new higher-margin projects.”

“As can be seen from our recent agreements, we expect to be operating in Azerbaijan for decades to come and we continue to see opportunities to work with the country to further explore and develop its significant resources.”

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