A Review of the Nigerian Energy Industry

BP awards $1.8bn Shah Deniz contract

BP_Logo30 April 2014, News Wires – BP has reportedly awarded a consortium of contractors a $1.8 billion award to transport and install topsides and subsea infrastructure at the giant Shah Deniz Stage 2 gas development in Azerbaijan.

The UK supermajor is developing Azerbaijan’s biggest gas field alongside Statoil of Norway and state-owned Socar.

They tapped the trio of Azeri outfit BOS Shelf, Saipem Contracting Netherlands and Dubai-based Star Gulf to transport and installation of jackets and topside units, subsea production systems and subsea structures, Reuters reported.

The award also reportedly includes the laying of over 360 kilometres of subsea pipelines, diving support services and the upgrade of three installation vessels – the pipelay barge Israfil Huseynov, the diving support vessel Tofiq Ismayilov and the derrick barge Azerbaijan.

The contract is reportedly worth $1.8 billion, the news wire said. Works is expected to be completed by the end of 2017, with first gas scheduled for the following year.

“This is a huge contract award and it marks a major milestone for this historic project,” Gordon Birrell, BP’s president for the Azerbaijan-Georgia-Turkey region, was reported as saying.

A BP spokesman in the US was not immediately available for further comment.

BP and its partners awarded the same consortium a separate $750 million contract earlier this month for fabrication of the topsides.

Last week, Baku Shipyard – a joint venture between Socar, the Azerbaijan Investment Company and Keppel Offshore & Marine – was awarded a $378 million contract to design and build a subsea construction vessel for the project. Delivery for that vessel is also expected in 2017.

The Shah Deniz II development, projected to cost some $28 billion, comprises two offshore platforms in the Caspian Sea.

Shah Deniz I has been producing gas since 2006 and has production capacity of about 10 billion cubic metres of gas per year.

It is hoped the next phase, with projected annual output of 16 Bcm, will help provide Europe an alternative gas supply to Russia’s Gazprom.



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