Shah Deniz scheduled for large-scale launch in 2017

The Caspian Shah Deniz gas field, located in the Azerbaijani sector of the sea, is expected to give 24 billion cubic meters of gas per year in a decade. The agreement on the second state of the field's
development was finalized by Azerbaijani State Oil Company (SOCAR) and BP, the operator of the project.

Despite the consequences of Mexican Gulf disaster, BP will not retreat from Caspian region. Moreover, it increases the volume of its investments to the sector, including Azeri-Chirag-Guneshli oil field
development project.

However, if the company's oil projects do not face considerable difficulties, gas development projects won't go so smoothly.

The Shah Deniz project providing gas supplies to Georgia and Turkey is now at its 'phase  1'. The launch of 'phase 2' has been delayed for a long time due to the problems with agreement finalization. And they were caused, among all other things, by uncertainty in finding future buyers of the gas.

According to Azerbaijani experts, one of the obstacles for the project's success is Turkey's position. Ankara wanted to become a re-exporter of Azerbaijani gas to EU, denying Baku the right to interact with the buyers itself. And without finalizing this aspect no agreement between project's shareholders could be reached. However, Baku and Astana reached an agreement in the issue, and Russian 'Gazprom' expressed its intent to purchase Shah Deniz gas, so all problems concerning 'phase 2' are expected to be solved by 2016-2017.

According to the preliminary prognosis the first major gas supply in the frame of 'phase 2' is expected to be obtained in the last quarter of 2016. Total expenditure of this project is 20 billion dollars, 3 of
this is to be invested into new infrastructure. Expected production indicator is 24 billion cubic meters of gas per year.

The general conception of Shah Deniz 'phase 2' will be worked out in 2011. Two new movable platforms are to be built at the depth of 150 meters and manifolds are to be used for the first time in the Caspian Sea. The depth of the oil wells is estimated as some 250-500 meters.

The head of 'BP Azerbaijan' declared that a new pipeline, parallel to the 'Baku-Tbilisi-Erserum'* one, will be constructed to deal with the gas output increase. In its turn, 'Baku-Tbilisi-Erserum' is to equipped with more powerful pumps to increase its efficiency.

* The South Caucasus Pipeline, also called Baku-Tbilisi-Erzurum Pipeline (BTE) was constructed in 2004-2006. On 21 May 2006, the commissioning gas was pumped to the pipeline from the Sangachal
Terminal. First deliveries through the pipeline commenced on 30 September 2006. Deliveries of gas from Shah Deniz gas field started on 15 December 2006. On 12 August 2008, the pipeline operator BP closed the pipeline for the safety reasons because of the South Ossetia conflict. Gas supplies were resumed on 14 August 2008

Evgeniy Krishtalev. Exclusively for VK