BP Looks Ahead Five Years for Shah Deniz Production

Energy giant BP has said it expects 2018 to yield the first gas from the second phase of Azerbaijan's Shah Deniz gas project.

All going well, "we will target 2018 for first gas [from Shah Deniz II]," Al Cook, BP-Azerbaijan's vice-president, told a news conference.

Output from Shah Deniz II is expected to reach 16 billion cubic metres (bcm) of natural gas per year, with 10 bcm earmarked for Europe and 6 bcm for Turkey. Shah Deniz I, which has been pumping gas since 2006, has production capacity of 8 bcm.

Shah Deniz is being developed by a consortium led by BP which also includes Norwegian major Statoil and the Azeri state energy firm SOCAR.

 SOCAR head Rovnag Abdullayev said in December gas from the second phase of the project would reach European markets in late 2017 or early 2018.

By the middle of this year, the Shah Deniz consortium is expected to choose whether to transport Shah Deniz II production via the Nabucco-West pipeline or the rival Trans-Adriatic pipeline (TAP). The consortium owns stakes in both pipeline projects.

Cook welcomed ratification by Azerbaijan and Turkey of the linked Trans-Anatolian (TANAP) gas pipeline agreement, which will bring Azeri gas through Turkey to the edge of Europe. TANAP will connect with either Nabucco West into Austria or TAP.

The Shah Deniz consortium is expected to choose by mid-2013 whether to transport Shah Deniz II production via the Nabucco-West pipeline or the rival Trans-Adriatic pipeline (TAP).

Cook said the Shah Deniz consortium planned to invest €7.5 billion ($10bn) on the Shah Deniz II project. "Over the next 18 months, in 2013 and the first half in 2014...BP on behalf of the consortium plans to make commitments to spend $10 billion," he said.