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SGC project being implemented ahead of schedule

16 February 2018 17:57 (UTC+04:00)
SGC project being implemented ahead of schedule

By Sara Israfilbayova

The Southern Gas Corridor (SGC) project is being implemented ahead of schedule.

BP Regional President for Azerbaijan, Georgia and Turkey Gary Jones made the remarks at a press conference in Baku on February 16.

He stressed that the costs for implementation of the Southern Gas Corridor (SGC) project will be lower than the amount envisaged in the project budget, adding that this is the biggest project implemented by BP.

The Southern Gas Corridor is one of the priority energy projects for the European Union, which aims to diversify routes and sources of energy supplies and thereby improve the energy security of the EU.

The Southern Gas Corridor is intended to deliver gas from the Azerbaijani gas condensate field Shah Deniz to Europe.

Gas as part of the second stage of the field development will be exported to Turkey and the European markets through the expansion of the South Caucasus gas pipeline and the construction of the TANAP and TAP gas pipelines.

The first gas within the Shah Deniz-2 project will be delivered to Turkey in 2018, and to Europe in 2019.

The cost of the Southern Gas Corridor project is estimated at $41.5 billion.

Jones went on to say that the gas delivery from Azerbaijan’s Shah Deniz gas condensate field to Turkey via the Trans-Anatolian Natural Gas Pipeline (TANAP) will start on June 30 this year, adding that this year it is planned to additionally produce 2 billion cubic meters of gas from the Shah Deniz field.

For this year, BP has a contract for the additional export of two billion cubic meters of the produced gas, he said, adding that the export volumes will increase from year to year.

TANAP project envisages transportation of gas from Azerbaijan's Shah Deniz field to the western borders of Turkey. The gas will be delivered to Turkey in 2018 and after completion of the Trans Adriatic Pipeline's construction the gas will be delivered to Europe in early 2020.

The length of TANAP is 1,850 kilometers with an initial capacity of 16 billion cubic meters of gas. Around six billion cubic meters of this gas is meant to be delivered to Turkey, with the remaining volume to be supplied to Europe.

Further, he emphasized that the SGC may transport the natural gas produced at the Shafag-Asiman offshore block of fields.

“Next year, exploration drilling at the block will start, and if gas reserves are discovered as a result of the drilling, the gas may be sent along the SGC,” Jones said.

Azerbaijan’s state oil company SOCAR and BP signed a contract on the Shafag-Asiman block of fields for a period of 30 years in October 2010. The exploration period is four years with a possibility of extension for three more years.

Speaking of Azeri-Chirag-Gunashli (ACG) block Jones mentioned that total expenditures on development of the block reached $33 billion up until today.

The regional president said that expenditures on ACG totaled to $1.18 billion in 2017.

He went on to say that from the beginning of the development, 3.3 billion barrels of oil were produced and production of 3 billion barrels more is expected.

“About $70 billion were invested to the projects in Azerbaijan operated by BP,” Jones said.

A contract for development of ACG block of oil and gas fields was signed in 1994 for 30 years.

Thirteen companies from eight countries (Azerbaijan, the U.S., Great Britain, Russia, Turkey, Norway, Japan, Saudi Arabia) have participated in signing of the "Contract of the Century".

Azerbaijan’s state oil company SOCAR and BP-operated Azerbaijan International Operating Company (AIOC) signed an agreement on future development of the ACG field in December 2016.

The agreement will cover the development of the field until 2050 and will add significant resource development potential. The document specifies the key commercial terms for the future development of the ACG field and enables the parties to conclude negotiations and finalize fully-termed agreements in the next few months.

The ACG field, which lies 120km off the coast of Azerbaijan, is considered to be the largest oilfield in the Azerbaijan sector of the Caspian Sea.

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