Shah Deniz consortium decided to commence Front End Engineering and Design (FEED)
Shah Deniz Stage 2, or Full Field Development (FFD), is a giant project that will bring gas from Azerbaijan to Europe and Turkey. This will increase gas supply and energy security to European markets through the opening of the new Southern Gas Corridor.
With capital expenditure estimated at $25 billion, the Shah Deniz Stage 2 project makes a major step forward with the approval by the Shah Deniz Consortium to start the FEED
With BP keeping the Operator role, the Shah Deniz consortium includes the State Oil Company of Azerbaijan (SOCAR), Statoil and Total.
The Shah Deniz Stage 2 project will bring gas from the Caspian Sea to markets in Turkey and Europe, opening up the ‘Southern Gas Corridor’.
The Shah Deniz 2 project is set to produce 16 billion cubic metres of gas per annum (bcma). The entry into FEED represents the start of a key phase in the project during which basic engineering studies will be refined, further wells will be drilled, commercial agreements will be finalised and key construction contracts will commence.
During the FEED phase of the project, the Shah Deniz consortium will finalise its selection of export routes across Turkey and into Europe.
One of the largest Oil & Gas projects in the world
Shah Deniz Stage 2 is expected to add a further 16 bcma of gas production to the approximately 9 bcma from Shah Deniz Stage 1.
This Stage 2 development of the Shah Deniz field, which lies some 70 kilometres offshore in the Caspian Sea, is expected to include:
- Two new bridge-linked production platforms
- 26 subsea wells to be drilled with 2 semi-submersible rigs
- 500 km of subsea pipelines built at up to 550m of water depth
- a 16 bcma upgrade for the South Caucasus Pipeline (SCP)
- The expansion of the Sangachal Terminal
- 4000km pipelines will be built and expanded to transport Shah Deniz gas through Turkey and Europe,
Gas sales and transit agreements were signed in October 2011 with BOTAS, the Turkish pipeline company, and the Turkish Government, – all within an Inter-Governmental Agreement (IGA) signed by the Republic of Azerbaijan and the Republic of Turkey.
Since that date, agreements have been signed to allow the Trans Anatolia Pipeline to commence engineering studies for potential gas transportation across Turkey.
Three options are being considered to carry gas into Europe:
1) The Trans Adriatic Pipeline (TAP) with a route to Italy
2) Nabucco West taking gas from Turkish-European border through Eastern Europe to the West
3) The South East Europe Pipeline (SEEP) taking gas through Hungary, Bulgaria and Romania.
The Shah Deniz consortium will make a final route selection in 2013.
Achieving this important milestone regarding the FEED, the Shah Deniz consortium maintains its target for completion and first gas exports around the end of 2017.
