Bloomberg: BP-Led Shah Deniz 2 Gas Project Needs $50 Billion Investment

The BP Plc-led Shah Deniz 2 natural- gas project will require as much as $50 billion in investment to open up a new supply route to Europe across Turkey, according to Azerbaijan’s state energy company.

“In a project like this, we have to invest $25 billion into drilling and production,” Elshad Nasirov, vice president of the State Oil Co. of Azerbaijan, or Socar, said in an interview in the capital of Baku. “Another $25 billion will be invested in different transportation projects from Baku to Turkey, across Turkey and from Turkey to the EU. So, in total, it makes $50 billion.”

BP and the Azeri government cleared the second phase of the Shah Deniz project last month, approving the start of the so- called front-end engineering and design process. The project will expand the field’s production by 16 billion cubic meters a year, with first exports due by 2017 or 2018.

Azerbaijan currently exports gas from the first phase of the Shah Deniz project to Georgia and Turkey via the South Caucasus Pipeline, or SCP. The pipeline, also led by BP, connects the Sangachal terminal south of Baku to Turkey’s eastern town of Erzurum via Georgia.  MORE