BP PLC and its partners announced they started natural gas production from Shah Deniz Phase 2 offshore Azerbaijan. The $28-billion project is the first Caspian Sea subsea development.
Shah Deniz 2, expected to produce 16 billion cu m of gas/year, is the starting point for the Southern Gas Corridor series of pipelines that will deliver gas from the Caspian Sea directly to European markets for the first time from 2020.
Shah Deniz is BP’s largest gas discovery. The giant field, found in 1999, was estimated to hold 1 trillion cu m of gas. It covers 860 sq km. The first phase of field development, Shah Deniz 1, began production in 2006 and currently supplies gas to Azerbaijan, Georgia, and Turkey.
BP is the operator with 28.8% interest. Partners are SOCAR with 16.7%, Petronas 15.5%, Lukoil 10%, NICO 10%, and TPAO 19% interest.
BP comments
Shah Deniz 2 is BP’s largest new upstream project in 2018. It is the second of six project startups that BP plans this year. The first was Atoll in Egypt. This series of developments stems from 2017’s seven major project completions.
At plateau, Shah Deniz 2 is expected to produce 16 billion cu m/year of gas incrementally to current Shah Deniz production. Together with output from the first phase of development, total production from the Shah Deniz field will be as much as 26 billion cu m/year of gas and as much as 120,000 b/d of condensate.
“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,” said Bob Dudley, BP group chief executive. “BP and our partners have safely and successfully delivered this multidimensional project as designed, on time and on budget.”
The project includes 26 subsea wells, a subsea production system, two bridge-linked offshore platforms and 500 km of subsea flowlines. Gas is transported to the onshore Sangachal terminal near Baku, which had new processing and compression equipment installed as part of the project.
The project also includes expansion of the South Caucasus Pipeline in Azerbaijan and Georgia, and two new compressor stations and a metering station in Georgia.
BP said Shah Deniz 2 is key to delivering the 900,000 boe of new production that it expects from new upstream major projects by 2021.
From the South Caucasus pipeline, gas is transported across Turkey through the new Trans-Anatolian Pipeline, which was inaugurated in June. The Trans-Adriatic Pipeline, when complete, will supply gas as far as Greece, Albania, and Italy.
Commercial deliveries to Europe are scheduled to start in 2020.