Azeri Shah Deniz gas-condensate field on stream

By OGJ editors
HOUSTON, Dec. 18 -- Commercial gas production has begun from Shah Deniz gas-condensate field in the Caspian Sea off Azerbaijan, reported consortium partner Total SA. Total reported that Shah Deniz field's Stage 1 gas production plateau is expected to be 300 MMcfd.

Shah Deniz, discovered in 1999, covers about 860 sq km about 70 km south of Baku in 50-600 m of water (see map, OGJ, June 27, 2005, p. 61). BP PLC is technical operator of the field and an associated onshore terminal, and Statoil ASA is commercial operator, responsible for gas sales, contract administration, and business development (OGJ, May 15, 2006, Newsletter).

In addition to BP and Statoil, which hold a 25.5% interest each, Shah Deniz consortium shareholders include State Oil Co. of the Azerbaijan Republic, Total, Naftiran Intertrade Co. Ltd., and LukAgip NV—each holding 10%—and Turkiye Petrolleri Anonim Ortakligi, 9% (OGJ, Mar. 17, 2003, Newsletter).

The field, which has gas reserves pegged at 25-35 tcf, is expected to produce 8.6 billion cu m/year of gas in Stage 1 and 37,000 b/d of condensate, which will be shipped to Ceyhan, Turkey, for processing (OGJ, Aug. 21, 2000, p. 68).

Gas is being exported to Azerbaijan, Georgia, and Turkey via the $1.3 billion, 700 MMcfd South Caucasian Pipeline. The line, also operated by BP, extends 430-miles from Baku to Tbilisi, Georgia, and Erzurum in eastern Turkey, paralleling the Baku-Tbilisi-Ceyhan crude oil pipeline.

Beyond Erzurum, there currently is no place for the remaining gas to go, but Georgia has agreed to place some of the gas in storage until Erzurum can be integrated into the Turkish gas network, according to the US Energy Information Administration.

Turkish state-owned Petroleum Pipeline Corp. will assume gas transportation at the border, and will build a new pipeline to tie in to the existing Turkish distribution network at Erzurum.

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