BP highlights Shah Deniz-2 progress
Contracts worth a total of around $10 billion have already been awarded for most of the major engineering, construction, and supply contracts for the second stage of development of the giant Shah Deniz field in Azerbaijan set to export gas to Europe via the Southern Gas Corridor (SGC) and diversification of EU energy supply.
According to project operator Gordon Birrell, BP’s Regional Director for Azerbaijan, Georgia and Turkey, the Shah Deniz project has made visible progress since the final investment decision of $28 billion was made last December.
“The awarded contracts give us the opportunity to start construction activities at all sites and fabrication yards of the country including Sangachal terminal, ATA yard near Baku and Baku Deepwater Jackets Factory”, said Birrell, adding that the company has started hiring a work forth that mostly citizens of Azerbaijan.
The total expenditure for Shah Deniz 2 in 2014 is expected to be roughly $4.5 billion, with much of that amount to be spent with companies that have a local partner, he said.
The contractors have also started an expansion of the Sangachal onshore gas terminal and preliminary works along the pipeline route.
As part of Shah Deniz-2, partners will expand the South Causacus Pipeline (SCPX project) with construction of the pipeline in parallel to existing infrastructure in Azerbaijan along with the construction two additional compressor stations in Georgia.
According to Mr. Birrell, the steel pipe sections and other required materials have been delivered to Azerbaijan.
“With the support of the Azerbaijani government we have already acquired lands along the 200 km of future pipeline route, pipe storages have been set up. With a very good start we believe to deliver the project in time and within the budget”, said Mr. Birrell, adding that it is a huge project that extends for over a 5-year period.
According to the schedule, the first gas will be introduced to Turkey in late 2018 with deliveries to Europe expected for the following year.
BP CEO Bob Dadly paid a visit to Baku on Wednesday to discuss the company's country operations and Southern Gas Corridor progress. He also met with President Ilham Aliyev and discussed BP’s further cooperation with SOCAR and future projects.
The $12 billion construction of TANAP, set to transport Shah Deniz-2 gas westward via Turkey to Greece border, will start next spring, said SOCAR president Rovnag Abdullayev.
“A groundbreaking ceremony for TANAP will kick off in Turkey in the first quarter of 2015,” he said, adding that the company is wrapping up a tender for construction of the future pipeline.
By January 9th of the coming year, interested companies have to return pre-qualification applications for construction of subsea section of TANAP. It is expected that the bid for construction of the two 18 km each marine section across the Marmara Sea will be called at the end of the first quarter of 2015 with a contract awarded in the third quarter.
The agreements for steel pipes supply for the 1,800 km-long TANAP pipeline were signed in on the 14th of October.
TANAP’s partner Turkish Botas and BP Pipeline have applied to the Turkish Antimonopoly Committee for approval of deals for acquisition of shares in the pipeline construction company.
Upon completion of deals SOCAR will hold 58 percent interest in TANAP with Botas having 30 percent and BP 12 percent.
TANAP, which will form a Turkish section of the Southern gas corridor, has to be constructed, tested and commissioned by 2018 to be ready to fill in with gas from Shah Deniz-2.
It will link to Trans Adriatic Pipeline at the Greek border and traverse through to Greece and Albania and on to Southern Italy.
Shah Deniz-2 will produce 16 bcm of gas a year with 10 bcm allocated to Europe and the rest 6 bcm supply to Turkey.
Kama Mustafayeva