Shah Deniz Partners to Make Pipeline Decision in June (Azerbaijan)

The Shah Deniz consortium, which operates Azerbaijan’s largest offshore gas field, has begun evaluating final offers it has received from the Nabucco Gas Pipeline International and Trans Adriatic Pipeline (TAP) for transportation of Shah Deniz Stage 2 gas to Europe.

The submissions allow the Shah Deniz consortium consisting of BP, Statoil, SOCAR, LUKOIL, TOTAL, NICO and TPAO , to conduct the final evaluation of each of the transportation options and make an informed decision on the preferred export route to Europe. The final decision on the European pipeline is expected to be made by end of June 2013.

The transportation offers include substantial information about the technical, regulatory, financial and other aspects of the Nabucco West and TAP projects. The consortium now enters a phase of detailed evaluation during which the offers will be assessed against the publicly communicated selection principles. Those are: commerciality, project deliverability, financial deliverability, engineering design, alignment and transparency, operability, scalability and public policy considerations. Clarification meetings will be held with each of the pipeline companies.

The transportation offers are expected to become legally binding by end of April 2013. In the next month the Shah Deniz consortium also expects to receive binding gas sales offers from potential gas buyers in Europe.

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’. Shah Deniz Stage 2 is expected to add a further 16 billion cubic meters per year (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 Azerbaijan sector of 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); and expansion of the Sangachal Terminal. Further pipelines will be built and expanded to transport Shah Deniz gas through Turkey and Europe

 

April 2, 2013

 

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