A Review of the Nigerian Energy Industry

Saipem confirms $1.8bn Shah Deniz 2 deal

Saipem30 April 2014, News Wires – Saipem has confirmed the award from BP to it and two partners of a fresh $1.8 billion contract for work on the UK supermajor’s huge Shah Deniz 2 gas field development in Azerbaijan.

The Italian contractor, BOS Shelf and Star Gulf FZCO have won the contract for transportation and installation of jackets, topsides and other equipment at the Caspian Sea project.

It had been reported that the trio had landed the deal to transport and install jackets, topsides and subsea infrastructure at Shah Deniz 2.

Apart from jackets and topsides, the consortium will transport and install subsea production systems, subsea structures and lay more than 360 kilometres of pipelines. They will also provide diving support (DSV) services, and upgrade three installation vessels: pipelay barge Isreafil Huseinov, DSV Tofiq Ismailov and derrick barge Azerbaijan.

The project will be completed by the end of 2017, Saipem said on Wednesday, with first gas scheduled for 2018.

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 2 development, projected to cost some $28 billion, comprises two offshore platforms in the Caspian Sea.

Shah Deniz 1 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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