Azeri Shah Deniz Field Produces 10% More

Output from Azerbaijan’s major gas field, Shah Deniz, rose by 10% during the first nine months of 2016. The BP-led project produced 8.021bn m³/yr, Socar’s vice president for oil and gas transportation and gas facilities Rahman Gurbanov told NGW.

He added that Azerbaijan purchased 2.64bn m³ of Shah Deniz gas itself to compensate for the gas deficit in the domestic market. “This volume accounts for 32.9% of the total sold gas from Shah Deniz. Accordingly, the State Oil Fund of the Republic of Azerbaijan (Sofaz) hasn’t received any money from gas sales of Shah Deniz since June. Sofaz’ income for the first five months of 2015 stood at $64mn,” he added.

The rest of the gas was exported to Turkey through Georgia. Tbilisi takes 5% of volume as transit fee. 

Gurbanov said that Azerbaijan exported 715.9mn m³  to Georgia (from Socar’s own gas) and swapped 167.3mn m³ with Iran during Jan-Sep. Iran takes 15% of the received Azerbaijani gas as swap fee and delivers the remaining volume to Nakhchivan Autonomous Republic with which it shares a border.

Shah Deniz, Caspian Sea

(Credit: BP)

Socar’s own commercial gas output (from fields operated by Azneft Production Union) also fell by 400mn m³ to 4.22bn m³ over the period.

However, Socar’s total output from fields, including its share from Shahd Deniz stood at 4.706bn m³, while the country’s total gas output, including the flaring gas reached about 22.289bn m³.

Azerbaijan’s total output increased by 741mn m³ despite Socar’s output falling by 545mn m³.

Azerbaijan also received 1.98bn m³ of associated gas from BP-operated Azeri-Chirag-Guneshli block (ACG), about 700mn m³ less than the same period in last year owing to more gas re-injection, which boosted the block’s oil output by 190,000mt to 23.76mn mt year-on-year, he said.

Azerbaijan added gas storage in the underground facilities by 310mn m³ to 2.963mn m³ by Oct.16, Socar VP said.

He said that some 981mn m³ of the mentioned volume was left from last year, while the exact amount of gas injection to two underground facilities, Kalmaz and Garadagh, during the current year was 1.336bn m³.

The amount of gas stored in Garadagh stood at 1.627mn m³ and the rest is stored at Kalmaz. He added that the gas injection to facilities would continue to the start of November at about 7-8mn m³/d.

(Source: Government)

Azerbaijan is developing the second phase of Shah Deniz, which is planned to export 16bn m³/yr of gas to Turkey and the European Union by 2021.

The shareholders of the project Shah Deniz are BP (operator; 28.8%), Turkish TPAO (19%), Malaysia's Petronas (15.5%), Socar (10%), Russian Lukoil (10%), Iranian NICO (10%) and Socar subsidiary SGC Upstream (6.7%).

Ilham Shaban