Azernews.Az

By Aynur Jafarova

Two major construction contracts, totally worth $1.972 billion, have been awarded for the second stage of development of the giant Shah Deniz gas condensate field in the Azerbaijani sector of the Caspian Sea, the Shah Deniz partnership announced on December 19.

"This follows the final investment decision for the Stage 2 of the development plan signed in Baku on December 17," BP Azerbaijan said.

The first contract, worth $998 million, is for the construction and commissioning support of the Shah Deniz Stage 2 onshore terminal facility at Sangachal near Baku.

This contract has been awarded to Tekfen-Azfen, which is an alliance between Tekfen Insaat ve Tesisat A.S. and Azfen JV.

The scope of work for this contract includes the construction of the main gas and condensate processing facilities at the Sangachal terminal, gas, condensate and MEG pipeline installation from the offshore pipeline beach landing site to the terminal facilities as well as brownfield works in the existing Sangachal Terminal.

The work under this contract is planned to commence in January 2014 with completion expected in 2018.

The second contract, worth $974 million, is for the fabrication, load out and offshore hook-up, and commissioning of the topside units of the two Stage 2 platforms - Production and Risers platform (SDB-PR) and Quarters and Utilities platform (SDB-QU).

This contract has been awarded to the AMEC-Tekfen-Azfen (ATA) consortium which is comprised of AMEC MMC, Tekfen Insaat ve Tesisat A.S. and Azfen joint venture.

Both topside units will be built at the ATA fabrication yard in Bibi-Heybat near Baku.

The construction works under this contract are also planned to commence in January 2014 with the completion expected in 2018.

The Shah Deniz Consortium has made the final investment decision (FID) on the second stage of offshore gas condensate field development. The ceremony of signing of the document kicked off in Baku on December 17.

The gas which will be produced in the second stage of Shah Deniz field is considered as the main source of the Southern Gas Corridor project.

BP also said the Azerbaijani gas may be transported to Bulgaria, Romania, Hungary and Austria within the project on transportation of the Azerbaijani gas to the European markets.

The new route would become an addition to TAP.

A consortium of Azerbaijani Shah Deniz gas condensate field development announced its choice of the TAP project in late June, as a gas transportation route to the European markets.

Shah Deniz-2 project authorization means the transition of the project from the concept into an immediate implementation stage.

Shah Deniz reserves are estimated at 1.2 trillion cubic meters of gas. The cost of the second phase of development of Shah Deniz gas condensate field is estimated at $25 billion.

Within the second phase of development it is planned to produce some 16 billion cubic meters of gas, six billion of which will be transported to Turkey and ten billion to Europe.

Connection of TAP to the Ionian Adriatic Pipeline (IAP) - a proposed gas pipeline in Western Balkans will allow entering the gas transported via TAP to the most of the South-Eastern European countries.

IAP envisages linking the gas pipelines of Croatia via Montenegro to the TAP in Albania. TAP has already inked a memorandum of understanding and cooperation with the developers of this project, in particular with Plinacro (Croatia), BH-Gas (Bosnia and Herzegovina), Geoplin Plinovodi (Slovenia) companies, as well as with the Montenegrin and Albanian governments.

A TAP and IAP working group has been established which regularly holds meetings with aim to synchronize the date of implementation of the both projects and to agree the technical matters of connection of the two pipelines.