SOCAR’s shipyard and BP signed an agreement for the construction of a multipurpose vessel to be used as part of the second phase of developing the Azerbaijani offshore gas condensate Shah Deniz field.

The agreement was signed by BP president for Azerbaijan, Georgia and Turkey Gordon Birrell and Baku Shipyard Director David Loh in Baku.

The contract is worth $378 million. The vessel will be constructed in April 2017.

During the signing ceremony, Minister of Economy and Industry Shahin Mustafayev stressed the importance of the new shipyard and its commissioning on time.

“Signing the agreement with BP emphasizes the high level of technical equipment of the shipyard and its compliance with international standards,” he said.

“Shah Deniz-2 project is large and unique,” SOCAR head Rovnag Abdullayev said. “It would be impossible to construct such a vessel in the Caspian Sea without a new shipyard.”

“It is possible to implement several large projects simultaneously thanks to a shipyard,” Abdullayev said. “In particular, bottom side of a new floating drilling rig will be constructed at the shipyard that is being created to meet SOCAR’s needs.”

“The subsea equipment and units will be placed on the vessel,” Birrell said. “Accordingly, it will be possible to conduct much work with the help of the vessel before the first gas is obtained as part of Shah Deniz-2 project.”

“The vessel will be built in accordance with high international standards that meet the requirements for implementation of the Shah Deniz project,” Birrel said.

Therefore, the vessel will be mainly used for the Shah Deniz-2 project, but it will also be involved in other work in the Caspian Sea, according to the BP representative.

Birrel also pointed out that given BP’s growing business in the region, the company will use the plant’s services to build new vessels.

In total, around 12 major contracts, totaling over $5 billion, have been signed under the Shah Deniz-2 project.

Baku Shipyard LLC is a joint venture of SOCAR, Azerbaijan Investment Company (AIC) and Keppel Offshore & Marine. It was opened by Azerbaijani President Ilham Aliyev in September 2013.

Keppel owns some 10 percent share of the plant and is fully responsible for its management and operation. The largest shareholders are SOCAR with 65 percent share and AIC which owns a quarter of the enterprise’s shares.

The plant is designed for constructing a large spectrum of specialized and merchant ships, including multi-purpose vessels such as platform supply vessels, as well as tankers and cargo ships. The enterprise also has ship-repair capabilities.

At full capacity, the plant will be able to carry out up to 100 repair or rebuild works a year.
The contract for development of the Shah Deniz offshore field, which has proven reserves of 1.2 trillion cubic meters of gas, was signed on June 4, 1996.

Participants in the Shah Deniz field development are the State Oil Company of Azerbaijan (SOCAR) with a share of 16.7 percent, British BP (28.8 percent), Norway’s Statoil (15.5 percent), Iran’s NICO (10 percent), French Total (10 percent), Russia’s Lukoil (10 percent), Turkish TPAO (9 percent).

A final investment decision was made on the second phase of Azerbaijani Shah Deniz offshore gas and condensate field development on December 17, 2013. Some 10 billion cubic meters of gas from this field will be supplied to the European market.

The gas to be produced within the second phase of the field development will be exported to Turkey and European markets by expanding the South Caucasus Gas Pipeline and constructing the Trans-Anatolian Gas Pipeline (TANAP) and the Trans-Adriatic Gas Pipeline (TAP).

Translated by N.H., L.Z.

Edited by C.N.