Caspian Report - Issue 06 - Winter 2014
You also want an ePaper? Increase the reach of your titles
YUMPU automatically turns print PDFs into web optimized ePapers that Google loves.
Shah Deniz 2<br />
FID Signing<br />
Ceremony<br />
GARETH M. WINROW<br />
20<br />
to accommodate new gas processing<br />
and compression units. A new pipeline<br />
will also be built to run parallel with<br />
the SCP to transport increased gas volumes<br />
to Georgia, Turkey and markets<br />
in Europe. In September 2013, 25-year<br />
gas sales agreements were finalized<br />
with nine European energy companies<br />
and utilities. At the signing ceremony<br />
for the second phase of development<br />
at Shah Deniz, it was also agreed to extend<br />
operations at the gas field by 13<br />
years to 2048 to enable appraisal work<br />
THE REALIZATION OF THE SGC, COULD ENABLE EU<br />
MEMBER STATES TO IMPORT GAS FROM ALTERNATIVE<br />
SOURCES AND THEREBY HELP REDUCE ENERGY<br />
DEPENDENCE ON RUSSIA.<br />
to be carried out, which could lead to<br />
further stages of development. The<br />
Norwegian company Statoil, seeing<br />
an opportunity to benefit financially<br />
and limit its risk exposure, decided to<br />
reduce its 25.5 percent stake at Shah<br />
Deniz and in the SCP to 15.5 percent,<br />
with the State Oil Company of Azerbaijan<br />
(SOCAR) and BP agreeing to<br />
purchase additional 6.7 percent and<br />
3.3 percent respectively. Once implemented,<br />
BP and SOCAR would then<br />
own 28.8 percent and 16.7 percent<br />
stakes in the Shah Deniz field and in<br />
the SCP. 2<br />
The expansion of the SCP network,<br />
which involves laying a parallel gas<br />
pipeline with an annual throughput<br />
capacity of 17 bcm, is expected to be<br />
completed by the end of 2018. This<br />
will include the construction of two<br />
compressor stations in Georgia to enable<br />
the tripling of gas exports from<br />
Shah Deniz. An official at SOCAR has<br />
noted that if necessary, the annual<br />
capacity of the SCP network could be<br />
expanded to as much as 60 bcm. This<br />
would presumably entail the construction<br />
of further parallel pipelines.<br />
What is clear is that the planned expansion<br />
of the SCP in the second<br />
phase of development at Shah Deniz<br />
will not be able to accommodate future<br />
production from other offshore<br />
Azerbaijani gas fields. Azerbaijan has<br />
proven gas reserves of over 2.55 tcm<br />
and anticipated reserves estimated<br />
at 6 tcm. Energy officials in Baku are<br />
2<br />
. The stakes of other consortium members working at Shah Deniz and in the development of<br />
the SCP are as follows: Total, 10 percent; Lukoil, 10 percent; Naftiran Intertrade Company, 10<br />
percent: and Turkish Petroleum, 9 percent.
Change language