The Shah Deniz consortium has reached an important milestone and approved the decision to commence Front End Engineering and Design (FEED) on the estimated $25 billion Shah Deniz Stage 2 project.
This was officially announced in Baku today during the meeting between the President of the Republic of Azerbaijan H.E. Ilham Aliyev and Bob Dudley, Group Chief Executive of BP, the Operator of Shah Deniz, who is on a working visit to Azerbaijan.
The Shah Deniz Stage 2 project will bring gas from the Caspian Sea to markets in Turkey and Europe, opening up the ‘Southern Gas Corridor’. Achieving this important milestone allows the consortium to maintain its target for first gas exports around the end of 2017.
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.
During the FEED phase of the project, the Shah Deniz consortium will finalise its selection of export routes across Turkey and into Europe.
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 (IGA) signed by the Republic of Azerbaijan and the Republic of Turkey. Since that date, agreements have been signed to allow the Trans Anatolia Pipeline to commence engineering studies for potential gas transportation across Turkey. 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 Turkish-European border through Eastern Europe to the West and the South East Europe Pipeline (SEEP) taking gas through Hungary, Bulgaria and Romania. The Shah Deniz consortium will make a final route selection in 2013.
[mappress] LNG World News Staff, April 17, 2012; Image: Total