Natural Gas Asia

Saturday, May 27, 2017


While the development of the further stage of the Shah Deniz gas field and Southern Gas Corridor (SGC) is reportedly continuing according to plan, Azerbaijan announced on May 5 that it is preparing to export 50bn m3/yr of natural gas in 2050, about 7 times more than the current level.

The state producer Socar and its partners aim to export initially 16bn m3/yr of gas from Shah Deniz stage 2 (SD2), now two-thirds complete, to Turkey and EU.

SD3, the biggest layer of Shah Deniz with 500bn m3 of reserves, is projected to become operational in 2032. Azerbaijan also plans to operate the Shefeg-Asiman, Naxchivan, Araz-Alov-Sharg, Absheron, Umid and Babek gas fields by 2030.

The country exported 2.458bn m3 in the first quarter of 2016, according to the state custom committee's latest report, while Socar head, Rovnag Abdullaev, said May 11 that Baku has put forward a proposal to Russian giant Gazprom to import 3-5bn m3/yr, mostly to allow associated gas to be re-injected into the Azeri-Chirag-Guneshli oil block to maintain the production level.

Coming to the TransAnatolian Pipeline (Tanap) project, its general manager Saltuk Duzyol told Anadolu Agency on May 5 that the slump in global oil prices and low commodity prices allowed the operator to cut its budget by a fifth. "Initially, the investment budget for Tanap was estimated as $11.7bn, Thanks to low oil prices, we reduced our budget to $9.2bn."

Duzyol also noted that $4.5bn worth of tenders have been completed and their contracts signed. The total capacity of the 1800-km Tanap is planned to rise to 23bn m3/yr by 2023 and to 31bn m3/yr by 2026.

Vagif Aliev, head of Socar's investments department, told NGE on May 1 that the length of produced pipes for Tanap stood at 1088 km as of April 25, of which 893 km are positioned on the route from the Georgia-Turkey border to Eskishekhir. He added that about 475 km of these pipes were welded, and of those, 20 km had been laid in the trench.

Coming to TAP, the consortium has already kicked off tender issuing and selecting contractors. The latest event was winning of a joint venture between Italy’s Renco and Greece’s Terna in the engineering, procurement and construction (EPC) contract for two compressor stations and a metering station for TAP.

Azerbaijan's energy minister Natig Aliev said last week that with the start of construction of TAP, no obstacles stand in the way of SGC.

Coming to the upstream sector of SD2, operated by BP, it will add a further 16bn m3/yr of gas production to the 9bn m3/yr produced by SD1.

Around $28bn in capital investment will be required to produce the gas and transport it to the Georgia-Turkey border (SCPX). Shah Deniz gas will travel 3,500 kilometres, to elevations of over 2,500 metres, and over 800 metres below the sea. 

Work is ongoing at the Sangachal reception terminal, the Amec/Tekfen/Azfen) yard near Baku, the Baku deepwater jackets factory and along the pipeline route. In the fourth quarter, the hull strips of the Subsea Construction Vessel Khankendi completed their journey from Singapore through the Volga-Don canal and arrived safely in Baku to join the bow section, which has now been completed at the Baku Shipyard.

Once completed, this new vessel will be deployed to the SD2 area for the construction of the subsea structures. Another major milestone was the delivery of the first two subsea christmas trees that were delivered to Baku from Leeds, UK, following completion of their UK testing scope.


Table: Contracts within Shah Deniz-2


Date of signing 


Contractor (s)

Value ($mn)



Constructing and commissioning support of the Shah Deniz Stage 2 onshore terminal facility at Sangachal near Baku

Tekfen-Azfen, an alliance between Tekfen Insaat ve Tesisat A.S. and Azfen JV.




Fabrication, load out and offshore hook-up and commissioning of the topsides units of the two Stage 2 platforms – Production and Risers platform (SDB-PR) and Quarters and Utilities platform (SDB-QU)

 Amec-Tekfen-Azfen (ATA) consortium which is comprised of AMEC MMC, Tekfen Insaat ve Tesisat A.S. and Azfen joint venture




Provision of detailed engineering, project management and procurement support services (The work under this contract is planned to commence in January 2014 with completion expected in 2018)






Construction and commissioning support of the SCPX project facilities in Georgia (Completion is expected in 2018)

Bechtel Enka joint venture which is comprised of Bechtel International Inc. and ENKA İnşaat ve Sanayi A.Ş.(Turkey)



Pipeline and facilities engineering and project management services for the SCPX project (completion expected in 2018)

Chicago Bridge & Iron UK Limited (CB&I)



Initial phase of the subsea and pipeline engineering and project management services

Wood Group Kenny Limited (WGK)



Engineering, procurement and construction of the offshore platform living quarters (completed in 2017)

Apply Emtunga




Horizontal directional drilling and line pipe installation for five river crossings of the SCPX project (Completion is expected in 2016)

DrillTec GmbH



Shaft and tunnel construction and line pipe installation for the two river crossings of the SCPX project (one in Azerbaijan and one in Georgia) (to complete in 2017)

 CSM Bessac



For the fabrication of the jackets for the two planned offshore platforms, pin piles and subsea structures (to complete in 2018)


consortium consisting of BOS Shelf LLC, Saipem Contracting Netherlands B.V. and Star Gulf FZCO




Design and build a subsea construction vessel (SCV). The SCV will be a new flagship vessel for the Caspian and will be used for the Stage 2 project subsea installation activities for over eleven years between 2017 and 2027. The vessel will be delivered in April 2017.


Baku Shipyard Company (Azerbaijan)



The scope of work of this contract includes the offshore transport and installation of both jackets and topside units, subsea production systems and subsea structures. It also includes the laying of over 360 kilometres of subsea pipelines, diving support services, the upgrade of three installation vessels – the pipelay barge “Israfil Huseynov”, the diving support vessel “Tofiq Ismayilov” and the derrick barge “Azerbaijan”. The work is expected to be completed by the end of 2017.

BOS Shelf LLC, Saipem Contracting Netherlands B.V. and Star Gulf FZCO consortium



Linepipe coating. The duration of this contract is 18 months

Bredero Shaw International BV



Construction of a 428 km pipeline loop and associated above ground installations, including block valves, a pigging facility and tie-ins in Azerbaijan and Georgia.

Construction of a 59 km second pipeline loop and associated above ground installations in Georgia.

The contract for pipeline construction in Azerbaijan and Georgia has been awarded to Saipem/Azfen which is a joint venture between Saipem Contracting Netherlands BV and Azfen JV.




Subsea flow-line coating and early subsea export line coating. Coating will commence in late 2014.

Bredero Shaw International B.V.




Application of anti-corrosion and concrete weight coatings to the Shah Deniz 2 subsea export pipelines, and upgrades to the Caspian Pipe Coatings (CPC) plant in Baku to enable the facility to meet the project’s requirements for anti-corrosion and concrete weight coating

ShawCor Nederland B.V. (Bredero)




Supply of the subsea production system (SPS) hardware. The scope of work under this contract includes the supply of equipment for the production clusters 3, 4 and 5 consisting of subsea manifolds, associated controls and connection equipment. The delivery of equipment will take place in phases over a period from 2016 to 2021.

FMC Kongsberg SubseaAS



The second of three planned batches of subsea production trees and ancillaries required for the full field development. The delivery of equipment will take place in phases over a period from 2016 to 2021.

OneSubsea (UK) Ltd



Transport and installation of the deeper water subsea production systems. The scope of work of the contract is for the management and operation of the new-build Subsea Construction Vessel (SCV) Khankendi for the transport and installation of the deeper water subsea production systems and subsea structures at all five flanks of the project.


BOS Shelf LLC, Saipem Contracting Netherlands B.V. and Star Gulf FZCO consortium




Ilham Shaban is Natural Gas Europe's expert on Caspian region energy issues

The article first appeared in Natural Gas Europe