Azerbaijani, British companies to build multipurpose vessel
By Aynur Jafarova
Azerbaijan's state energy company SOCAR's Shipyard and British BP signed an agreement to construct a multipurpose vessel.
The vessel will be exploited as part of the second stage of development of Azerbaijan's giant Shah Deniz gas condensate field in the Azerbaijani sector of the Caspian Sea.
The $378 million agreement was signed by BP President for Azerbaijan, Georgia, and Turkey Gordon Birrell and Baku Shipyard General Manager David Loh in Baku on April 23.
The construction of the vessel will be completed in April 2017.
During the signing ceremony, Economy and Industry Minister Shahin Mustafayev stressed the importance of Baku Shipyard and its on-time commissioning.
"Signing the agreement with BP highlights the high level of technical equipment at the shipyard and its compliance with international standards," he said.
SOCAR head Rovnag Abdullayev said the Shah Deniz-2 project is large and unique.
"It would be impossible to construct such a vessel in the Caspian Sea without a new shipyard," Abdullayev said.
He also noted the existence of a shipyard makes it possible to implement several large projects simultaneously. In particular, the bottom side of a new floating drilling rig will be constructed at the shipyard.
Birrell, in turn, said the sub-sea equipment and units will be placed on the vessel. Accordingly, it will be possible to conduct more work with the help of the vessel before the first volume of gas is obtained as part of the Shah Deniz-2 project.
"The vessel will be built in accordance with high international standards that meet the requirements for implementing the Shah Deniz project," Birrel said.
The vessel will be mainly used for the Shah Deniz-2 project, but it will also be involved in other works in the Caspian Sea, the BP representative added.
Birrell also said given the BP's growing business in the region, the company will use the plant's services to construct new vessels.
In total, around 12 major contracts totaling over $5 billion have been signed under the Shah Deniz-2 project.
Baku Shipyard LLC is a joint venture of SOCAR, Azerbaijan Investment Company (AIC), and Keppel Offshore & Marine Ltd. (Keppel O&M). It was inaugurated by Azerbaijani President Ilham Aliyev in September 2013.
Keppel O&M owns 10 percent of the project. The largest shareholder at 65 percent is SOCAR, followed by AIC which owns 25 percent equity in the company.
The plant is designed for constructing a large spectrum of specialized and merchant ships, including multi-purpose vessels such as platform supply vessels, tankers, and cargo ships. The enterprise also has ship-repair capabilities. The plant's production capacity is 25,000 tons of steel per year. The facility is designed to produce four tankers with the deadweight of 15,000 tons or two tankers with the deadweight of 70,000 tons per year.
At full capacity, the plant will be able to carry out up to 100 repair or rebuild work annually.
The gas to be produced at the second stage of Azerbaijan's Shah Deniz field development will be the main source of the Southern Gas Corridor, which envisages the transportation of the Caspian gas to the European markets.
The Shah Deniz consortium announced the selection of TAP as the main route for transporting its gas to Europe in late June. Another pipeline which was vying for Azerbaijan's gas transportation to Europe was Nabucco West.
Azerbaijan agreed to sell over 10 billion cubic meters of natural gas a year from the second phase of its Shah Deniz development to nine companies in the European Union in September 2013.
The contracts were signed for 25 years between SOCAR and the European utilities, including Axpo Trading AG, Bulgargaz EAD, Depa, Gas Natural Fenosa, Hera Trading Srl, Shell Energy Europe, Enel SpA, E.ON SE, and GDF Suez SA.
The initial capacity of TAP will amount to 10 billion cubic meters per annum with the possibility of expanding to 20 billion cubic meters per annum.
TAP's shareholders include BP (20 percent), SOCAR (20 percent), Statoil (20 percent), Fluxys (16 percent), Total (10 percent), E.ON (9 percent), and Axpo (5 percent).
The construction project of TAP is planned to start in 2015.