BP Prepares for Shah Deniz 3

UK major BP plans to start reviewing the results of last year’s 3D seismic survey of the deeper horizons of Azerbaijan's offshore Shah Deniz gas field at the end of this year.

A senior geologist at the company Greg Riley told journalists in Baku on February 4 that BP continued preparation for SD 3 implementation and the collection of data from the Caspian Sea field. However, at the moment this is not a priority for BP, he said, because it is focused on implementation of SD 2.

A source from state Socar told NGE on February 5 that the remaining gas reserves at SD 1 were 220bn m³, while the reserves of SD 2 are estimated at 400bn m³.

Azerbaijan started SD 1 in 2007 and produces about 10bn m³/yr from this phase, while producing 16bn m³/yr from SD 2 in 5 years has been planned. "The reserves of SD 3 are estimated at 500bn m³ and we are planning to commence this phase by 2025," the official told NGE.

A senior geologist at Socar, Khoshbakht Yusifzada, told a press conference late 2015 that the peak level of gas production from SD 2 will reach 16bn m³/yr in 2022 and remain at that level until 2029, then its output would start to decrease. "By that time SD 1 will have been in operation for over 22 years and the production will be going down every year," he said. Therefore, BP needs SD 3 to support stable volume of exports in long term.

The contract for the Shah Deniz field development was signed in Baku on June 4, 1996. The project partners today are BP (operator with 28.8%), Petronas (15.5%), Socar (16.7%), LUKoil (10%), Iran's Nico (10%), Total (10%) and Turkish TPAO (19%). So far over 60bn m³ of gas have been produced.

Ilham Shaban is Natural Gas Europe's expert on Caspian region energy issues