BP boosts output from Azerbaijan's Shah Deniz 2 gas field with new phase

BP has started production from a new phase of its giant Shah Deniz 2 gas field in Azerbaijan's sector of the Caspian Sea, boosting output by 400 MMcf/d (11.3 million cu m/d) and raising annual production by 4.1 Bcm, it said July 6.

The East South flank phase will raise total output from Shah Deniz 2 to "well over" 2.4 Bcf/d -- the equivalent of 68 million cu m/d or close to 25 Bcm/year.

Full production volumes are expected to be reached in Q3 this year, BP said, with the gas to be supplied to meet the Shah Deniz consortium's commitments under its existing Shah Deniz 2 sales and purchase agreements.

BP said the contract with Turkish state gas importer Botas had already reached plateau levels, meaning that the extra gas will mostly be going to Europe under the 10 Bcm/year of contracts held for gas exported to Europe via the TANAP and TAP pipelines.

BP said that the East South flank consisted of four new wells drilled in 540 meters of water served by two new flow lines and a number of subsea structures.

"This is the biggest milestone we had planned to achieve in Shah Deniz this year and we achieved it on schedule and within the budget despite the challenges and restrictions caused by the COVID-19 pandemic," Gary Jones, BP's regional president for Azerbaijan, Georgia and Turkey, said.

First phase

Discovered in 1999, the Shah Deniz gas field covers an area of around 860 sq km and was estimated to hold around 1 trillion cu m of gas.

The field has been developed by a consortium of BP (28.8%), Turkey's TPAO (19%), Malaysia's Petronas (15.5%), AzSD (10%), Russia's Lukoil (10%), NICO (10%) and SGC Upstream (6.7%),

The first phase of Shah Deniz began in 2006, supplying 10 Bcm/year to Azerbaijan, Georgia and Turkey.

The consortium's contract to supply Turkey's state gas importer Botas with 6.6 Bcm/year of gas from the first phase, timed out on April 16 this year and has yet to be renewed.

Supply from Shah Deniz 2 under contracts totaling 16 Bcm/year, began in June 2018, with the start of supply of gas to Botas under a contract for 6 Bcm/year, which has now reached its plateau.

The export of gas to Europe via the TANAP and TAP pipelines began late last year, with the first gas reaching Italy on Dec. 30.