Official: Shah Deniz Output May Be Higher Than Last Year, Despite Apparent Production Dip
A BP official has said that the gas production capacity from Shah Deniz Stage 1 (SD1) will not decrease during the current year despite the fact that current figures indicate a lower production level in the first nine months of the year compared to the same period last year.
BP and its partners produced 7.2 billion cubic metres (bcm) of gas from SD1 in the period of January-September 2015, some 50 million cubic metres (mcm) less than the same nine months of last year, BP reported on November 30.
However, Company Public Relations Manager for BP Azerbaijan Tamam Bayatli told Natural Gas Europe that “In fact, performance of our production exceeds our plan for this year and we achieved very good results for the current year."
According to Ms. Bayatli, despite suspending gas production for three weeks in August dues to modernisation works, the suspension didn’t really affect the field's production level significantly. "Closer to the end of the year, better results are being expected," she said.
“We do not expect that SD1 production level in 2015 to be less than last year’s--maybe a bit more”, Bayatli said.
Production capacity of the existing facilities at Shah Deniz is currently 29.5 mcm/d or about 10 bcm per year. 9.8 bcm of gas was produced last year.
In the period of January-September of 2015, some $370 million was spent as operating expenses (Opex) and $3.37 billion as capital expenditures (Capex) for production in the Shah Deniz project. The majority of capital expenditures refer to Shah Deniz Stage 2, which aims to produce 16 bcm per annum of gas by 2019.
Capital expenditures include reconstruction of the Shah Deniz-1 platform in August 2015; certain works for safe operation of subsea infrastructure; the implementation of an advance offshore drilling operations at the Shah Deniz-2 project (8 wells have been drilled already); reconstruction of the “Istiqlal” floating drilling rig; building of top platforms; building of platform supporting blocks; erecting of gas terminals in Sangachal; and the expansion of the South Caucasus Pipeline (which involved constructing a new gas pipeline in the territory of Azerbaijan, to be joined to the first pumping station in Georgia, and increasing of the capacity of two pumping stations in the territory of Georgia).
Shah Deniz is 70 kilometres to the south-east of Baku, located at a depth of 50 to 500 metres in the Caspian Sea.
A Production Sharing Agreement for the Shah Deniz project was signed on July 4, 1996 in Baku. It was approved by Parliament on October 4,1996 and entered into force on the 17th of the same month. In May 1999, the first well drilled discovered a gas condensate layer in the Shah Deniz gas-condensate field.
First gas production at the Shah Deniz began in November 2006. The first commercial gas exports began in July 2007.
According to the last statistics from the State Oil Company of Azerbaijan Republic (SOCAR), 66 bcm of gas and 17 million tons of condensate were produced from the Shah Deniz-1 project until November 1, 2015.
36 bcm of gas was exported to the Turkish market, 4.8 bcm to the Georgian market, and 25.2 bcm sold to SOCAR to be consumed domestically.
Shah Deniz's participating interests are: BP (operator – 28.8%), AzSD (10%), SGC Upstream (6.7%), Petronas (15.5%), Lukoil (10%), NICO (10%) and TPAO (19%).