Turkish Tekfen consortium, BP sign $975 mln deal in Shah Deniz II

ISTANBUL

16 billion cubic meters per year of gas produced from the giant Shah Deniz field will be carried some 3,500 kilometers to provide energy for millions of consumers in Georgia, Turkey, Greece, Bulgaria and Italy.

A consortium including the Turkish construction firm Tekfen Construction signed a $975 mln deal with BP Exploration to build two offshore platforms in Azerbaijan’s Shah Deniz project.

The consortium is composed of engineering and project management companies Azeri Azfen, AMEC and Tekfen, whose share in the project was worth $496 million, the company said in a statement to the Public Disclosure Platform (KAP). 

The construction is expected to last 42 months, according to the statement. 

The Shah Deniz consortium on Dec. 17 announced the final investment decision for the Stage 2 development of the Shah Deniz gas field in the Caspian Sea, offshore Azerbaijan. This decision 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.

The Shah Deniz project entails several elements: offshore, it includes drilling and the completion of 26 subsea wells and the construction of two bridge-linked platforms; onshore, there will be new processing and compression facilities at Sangachal.

The total cost of the Shah Deniz Stage 2 and South Caucasus Pipeline (SCP) expansion projects will be around $28 billion. 16 billion cubic meters per year of gas produced from the giant Shah Deniz field will be carried some 3,500 kilometers to provide energy for millions of consumers in Georgia, Turkey, Greece, Bulgaria and Italy. The first delivery is targeted for late 2018, with sales to Georgia and Turkey, and then first deliveries to Europe will follow approximately a year later.

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 bcma of Shah Deniz Stage 2 gas will be delivered to consumers in Turkey. All gas sales and transportation contracts will be managed by the Azerbaijan Gas Supply Company established by Shah Deniz co-ventures under the operatorship of SOCAR. 

The Shah Deniz field was discovered in 1999. Azerbaijan has been exporting gas to Georgia and Turkey since 2006 from the Shah Deniz stage 1 development.