Azernews.Az

BAKU – The financing for Azerbaijan’s Shahdaniz field, the largest offshore gas field development in the Caspian Sea, has achieved "full completion", Russia’s Lukoil and the European Bank for Reconstruction and Development announced, EBRD said on its website Tuesday.

Shahdaniz is now the largest new gas field in the region, serving both the Azeri and Georgian gas markets, as well as exporting large quantities of gas to international consumers.

The Shahdaniz project has been at the core of the EBRD’s efforts to promote the development of the EITI (Extractive Industries Transparency Initiative) in Azerbaijan, which has now become the first country to qualify as compliant with the industry’s transparency standards, the bank said.

The EITI Global Secretariat in Oslo officially named Azerbaijan as the first country to be awarded the title of "EITI Compliant".

"The Shahdaniz project is very important for the region, providing jobs and development opportunities not just in Azerbaijan, but more widely throughout the Caucasus region", said Kevin Bortz, Director of the EBRD’s Natural Resources Team.

"In addition, this is a new source of gas not just for the domestic markets of Azerbaijan and Georgia, but also for the region, increasing diversification and stability of supplies," Bortz added.

The development of the Shahdaniz field together with Azerbaijan’s AIOC opened up the whole Azeri oil and gas sector and introduced the most advanced drilling and completion technologies.

Lukoil’s investment in the Shahdaniz Stage 1 project dates back to 2004. In July 2005, the EBRD provided $180 million in 12-year project finance for it.

Peak production during the first stage of Shahdaniz development is forecast at up to 9bn cubic meters. According to projections, gas production will be brought up to 25bn cubic meters per year under the second stage of development.

Shahdaniz holds estimated reserves of 1.2 trillion cubic meters of gas.

Lukoil’s share in the project is 10 percent. The other partners are BP (25.5 percent), Statoil (25.5 percent), Total (10 percent), NICO (10 percent), Azerbaijani state energy firm Socar (10 percent) and TPAO (9 percent).