Gas industry will be vital for Azerbaijan for 30-40 years - expert

Preliminary engineering and design work in the second stage of development of the Shah Deniz offshore gas condensate field will allow the final cost of the Shah Deniz-2 project to be set, head of the State Oil Company of Azerbaijan (SOCAR) Rovnag Abdullayev said on Wednesday, Trend reports.

"Preliminary engineering and design work will clarify the cost of implementing the second phase of the Shah Deniz field development," Abdullayev said.

Abdullayev noted that the declared cost of the Shah Deniz - 2 project of $25 billion, which was defined during the preparation of a feasibility study, is not definitive.

"Costs can vary by 30 percent, either upward or downward in the course of the project," Abdullayev said.

Speaking to VK, Azerbaijani expert Ilham Shaban said that the country's future for at least 30-40 years will be connected with the gas industry.

The expert also stressed the importance of the Shah Deniz project for Azerbaijan.

This week, BP announced the preliminary engineering and design work in the second stage of development of the offshore gas condensate field Shah Deniz.

The Shah Deniz 2 project is set to produce 16 billion cubic metres of gas per year.
The entry into FEED represents the start of a key phase in the project, during which engineering studies will be refined, further wells will be drilled, commercial agreements will be finalised and key construction contracts will commence, BP said.

During the FEED phase of the project, the Shah Deniz consortium will finalise its selection of export routes across Turkey and into Europe.

The gas reserves of Shah Deniz field are estimated at 1.2 trillion cubic meters.

The contract to develop the offshore Shah Deniz field was signed on June 4, 1996. Participants to the agreement are: BP (operator) - 25.5 per cent, Statoil - 25.5 per cent, NICO - 10 per cent, Total - 10 per cent, LukAgip - 10 per cent, TPAO - nine per cent and SOCAR-10 percent.