Project Profile
Value: US$11.775bn
Location: Caspian Sea, 70 km south-east of Baku
Capacity to produce: 22,318Bcf of natural gas and 994Mbbl of condensate over its full life
Production: 9.9 billion standard cubic metres (bcm) of gas & 33 million tonnes (about 18.3 million barrels) of condensate. (2015)
Water Depth: 50 to 500 metres
Start-up Year: 2006
The Shah Deniz field was discovered in 1999 and it is located on the deep water shelf of the Caspian Sea, 70 km south-east of Baku, in water depths ranging from 50 to 500 m. Shah Deniz Stage 1 began operations in 2006. It has the capacity to produce around 10 billion cubic meters of gas per annum (bcma) and approximately 50,000 barrels a day of condensate. Despite the complexities of drilling the wells, building a platform, constructing an onshore terminal and laying a 700 km South Caucasus pipeline (SCP) through Azerbaijan and Georgia to the Turkish border, Shah Deniz Stage 1 was developed in only seven years. Since Shah Deniz has proved a secure and reliable supplier of gas to Azerbaijan, Georgia and Turkey.
During 2014, the existing Shah Deniz facilities were further de-bottlenecked which increased their production capacity from 27.3 million standard cubic metres to 29.5 million standard cubic metres of gas per day. In 2015, the field produced 9.9 billion standard cubic metres (bcm) of gas and 2.33 million tonnes (about 18.3 million barrels) of condensate.
The second stage of the Shah Deniz, is expected to enter its production phase in 2018. Stage 2 of the BP-operated field is approximately 60% complete. The field is expected to achieve peak production in 2022 at 2,521Mcfd of gas and 118,467bpd of condensate. BP estimates that overall production from the field will increase significantly following the start of stage 2 in 2018. Shah Deniz is expected to have a seven-year production plateau resulting in the extraction of 22,318Bcf of natural gas and 994Mbbl of condensate over its full life. The project\'s remaining net present value (NPV) is estimated to be US$11.775bn assuming a 10% discount rate with an internal return rate (IRR) of 12.8% for the field owners.
BP is the operaror of the project on behalf of its partners in the Shah Deniz Production Sharing Agreement (PSA). Shah Deniz is structured as an unincorporated Joint Venture (JV) partnership. BP is the operator of the Shah Deniz JV.
Operators:
BP: Operator with 100% interest
Contractors:
Technip: BP and its Shah Deniz partners have awarded Technip-Coflexip a contract worth about US $300 million for the stage 1 development of the Shah Deniz gas field in the Azerbaijan sector of the Caspian Sea. This contract includes the design, engineering, procurement, assembly, installation, hook-up and project management assistance for a TPG 500 drilling and production platform. (2003)
Wood Group:
- Won a new five year contract with BP-operated projects, valued at US$500 million, to deliver services to eight facilities, offshore Azerbaijan. Effective immediately, Wood Group PSN (WGPSN) will provide engineering, procurement and construction management services (EPCM) under the contract, which has the option of two, two year extensions. (April, 2016)
- Secured engineering services, pre-front-end engineering design (pre-FEED), and FEED engineering services. (February, 2017)