Shah Deniz Partners Announce FID for Shah Deniz II Gas Project
Wednesday, 18 December 2013
The Shah Deniz consortium announced the final investment decision (FID) for the second stage development of the Shah Deniz gas field in the Caspian Sea, offshore Azerbaijan, consortium co-venturer British Petroleum (BP) said.
The FID triggers plans to expand the South Caucasus Pipeline through Azerbaijan and Georgia, to construct the Trans Anatolian Gas Pipeline (TANAP) across Turkey and to construct the Trans Adriatic Pipeline (TAP) across Greece, Albania and into Italy. Together these projects, as well as gas transmission infrastructure to Bulgaria, will create a new Southern Gas Corridor to Europe, BP said in a press release.
The total cost of the Shah Deniz Stage 2 and South Caucasus Pipeline (SCP) expansion projects will be around $28 billion (20.3 billion euro), it added.
A total of 16 billion cubic metres (bcm) per year of gas produced from the giant Shah Deniz field will be carried some 3,500 kilometres to consumers in Georgia, Turkey, Greece, Bulgaria and Italy. First gas is targeted for late 2018, with sales to Georgia and Turkey. First deliveries to Europe will follow approximately a year later.
In the shorter term, the Shah Deniz partners have agreed terms with Azeri state-owned oil and gas company SOCAR for expanding production through the existing facilities by 1.4 bcm per year. The production increase is already in progress and is expected to be completed by the end of 2014.
SOCAR and the Shah Deniz partners have also agreed terms for extending the Shah Deniz Production Sharing Agreement (PSA) up to 2048. The Shah Deniz partners have agreed to undertake exploration and appraisal work on prospects within the PSA area.
Some 10 bcm per year of Shah Deniz gas are expected to be delivered for 25 years to customers in Italy, Greece and Bulgaria. In addition, some 6 bcm per year of Shah Deniz Stage 2 gas will be delivered to consumers in Turkey.