The land-locked Caspian Sea returned to offshore industry centre-stage last month with BP’s confirmation that front end engineering and design had begun for stage two of the huge Shah Deniz gas field development. Terry Knott reports.
The Shah Deniz consortium, led by operator BP, launched the FEED in April for the next development phase at Shah Deniz in the Azerbaijan sector of the Caspian Sea, some 70km south of Baku. Stage two, with an estimated price tag of $25 billion, aims to produce an additional 16 billion m3 (bcm) of gas per year from the giant field. The gas will be piped to markets in Turkey and Europe, opening up the ‘Southern Gas Corridor’, with a target for first gas exports around the end of 2017.
The first phase of development came onstream in 2007 and produces around 9bcm per year of gas. The Shah Deniz reservoir, discovered by BP in 1999, lies some 4500m below the seabed and is estimated to contain over 1000bcm of gas and 2100 million barrels of condensate liquids.
Referring to the FEED work, Rashid Javanshir, president of BP’s Azerbaijan, Georgia and Turkey region, said: ‘We are pleased to announce this major step forward. Over the past two years we have made substantial progress on all the individual components of this megaproject. Engineering studies, commercial agreements and the support of Azerbaijan and other governments give the Shah Deniz consortium the confidence to embark upon this FEED phase.’
The stage two development is expected to include two new bridge-linked production platforms, 26 subsea wells to be drilled with two semisubmersible rigs, 500km of subsea pipelines in water depths up to 550m, an expansion of the Sangachal terminal and an upgrade of the existing South Caucasus Pipeline (SCP) to handle the additional gas.
Three for FEED
Three engineering contractors will carry out the FEED. KBR will do the platform jackets and topsides facilities plus the terminal expansion, while JP Kenny will focus on subsea systems and CB&I on the SCP upgrade, including compressor stations. Up to 4000km of new pipelines will be required to transport the gas to Europe – currently the 691km-long SCP takes gas from Sangachal through Azerbaijan and Georgia, crossing the Caucasus Mountains, to the Turkish border, where it joins the Turkish gas distribution network. Three options are being considered to carry gas into Europe: the Trans Adriatic Pipeline (TAP) with a route to Italy; Nabucco West taking gas from the Turkish- European border through Eastern Europe to the West; and the South East Europe Pipeline (SEEP) taking gas through Hungary, Bulgaria and Romania.
Gas sales and transit agreements were signed in October 2011 with Botas, the Turkish pipeline company, and the Turkish government – all within an inter-governmental agreement signed by Azerbaijan and Turkey. Since that date, agreements have been signed to allow the Trans Anatolia Pipeline to start engineering studies for potential gas transportation across Turkey.
The Shah Deniz consortium will make a final route selection in 2013. OE
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