Azeri-Chirag-Gunashli Efficiency to Rise

Azeri consortium leader BP will re-inject more associated gas into the Azeri-Chirag-Gunashli reservoir to help to support pressure and steady oil production, the operator’s regional president Gordon Birrell said March 10.

“We recently upgraded four gas compressors and introduced a new technology that allow us to enhance gas injection,” he said. The excess gas will continue to be delivered to the state energy company Socar.

“It is a small amount relative to a large amount that we are injecting. However it does not mean that after some time we will stop delivering associated gas to Azerbaijan. We will always have some excess volumes, for instance during maintenance of the compressors. So instead of flaring this gas we will deliver it to Socar,” he explained.  

Three major milestones have to be achieved this year in Shah Deniz 2 development to keep up with plans for gas production and export as scheduled, said Birrell.

Later this year a first jacket for one of the Shah Deniz-2 fixed platforms will be towed out for marine installation.

The subsea export pipelines will have to be built, from the site of the future platforms to the Sangachal gas terminal by the end of this year.

And last, he said, “we must complete the integration of all the major components of the subsea construction vessel in the Baku shipyard by the end of this year.” Once completed, the vessel will be deployed to Shah Deniz area to start subsea wellhead installation on the sea bed.

So far, about two thirds of the overall scope of work is done, he said. “We are still on track for delivering the first gas to Turkey in 2018 and to Europe in 2020,” he said, adding that the start-up of gas production from stage 2 is planned for some time in mid-2018.

Cost savings

The other two major projects – the TransAnatolia Pipeline (Tanap) and the TransAdriatic Pipeline (TAP) that will form the Southern gas corridor for delivery Caspian gas to Europe – have been progressing well too, he said. BP is a partner in both.

Birrell said that the low energy price environment supports some cost savings on construction, material and equipment contracts as well as increase overall efficiency of the project. Azerbaijan's energy minister Natig Aliev told NGE in an interview this week that since 2013 when the partners contracted to build Tanap, the cost has fallen by $2.5bn to $9.2bn, owing to the falling cost of materials and services.

“By the time we start a gas export to Europe we expect gas prices will be back up. So you could argue that value has gone up because the cost of the project comes down,” Birrell said.     

According to him last year the consortium produced about 10bn m³ of gas and 18.3mn barrels of condensate from Shah Deniz. “It is a remarkable performance as we have been producing from 6 wells only. The field remains very stable, consistent and reliable supplier of gas for Azerbaijan, Georgia and Turkey,” Birrell said.

The Sangachal terminal was operating at 100% efficiency, he said.

BP is continuing its other two exploration projects in Azerbaijan: the shallow-water Absheron Peninsula (SWAP) and Shafag-Asiman.

While SWAP could be moved to the exploration drilling by the end of 2017, Shafag-Asiman’s future is uncertain owing to a shortage of semi-submersible drilling rigs in Caspian that are suitable.

There is much more gas in the southern Caspian that we thought before, Birrell said. While remaining an oil producer Azerbaijan will become a very significant gas producer and major supplier though the southern gas corridor to Europe.

And he said BP, which has been operating for more than 20 years in Azerbaijan, expects to play that role there for years to come.  

Azerbaijan desk