BP stretches out Shah Deniz II 'to 2018'

Shah Deniz: BP-led project now aiming for first gas from second phase in 2018

BP has reportedly said it is now targeting 2018 for the first gas from the second phase of Azerbaijan's Shah Deniz gas project, which was previously slated for the end of 2017.

Al Cook, BP Azerbaijan vice-president, told a news conference in Baku that if all necessary agreements are achieved, "we will target 2018 for first gas (from Shah Deniz II)," Reuters reported.

The British oil major leads the consortium operating Shah Deniz II that also includes Lukoil, Total and Statoil, as well as Azeri state player Socar, Turkiye Petrolleri and Naftiran Intertrade.

Cook said the Shah Deniz consortium planned to invest $10 billion on the Shah Deniz II project.

"Over the next 18 months, in 2013 and the first half in 2014 Shah Deniz plans to make commitments to spend $10 billion on this project. BP on behalf of the consortium plans to make commitments to spend $10 billion," he said.

Officials from Socar had said the second phase was expected to start by the end of 2017, but Socar head Rovnag Abdullayev admitted in December the gas would reach European markets "not earlier than the second quarter of 2018".

Shah Deniz, Azerbaijan's biggest gas deposit, is estimated to contain 1.2 trillion cubic metres of gas and has been pumping gas from its first phase since 2006 with a capacity of 8 billion cubic metres.

Output from Shah Deniz II is expected to reach 16 billion cubic metres (bcm) of natural gas per year, with 10 bcm earmarked for Europe and 6 bcm for Turkey.

The Shah Deniz consortium has recently taken up stakes in two pipeline projects ahead of deciding by the summer whether to transport Shah Deniz II production via the Nabucco-West pipeline or the rival Trans-Adriatic pipeline (TAP).

As reported by Upstream earlier this month, the final investment decision on Shah Deniz II itself has already been pushed back to the end of 2013.

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