Shah Deniz

The Shah Deniz (SD) field was discovered in 1999. It is one of the world’s largest gas-condensate fields. It is located on the deep water shelf of the Caspian Sea, 70 km south-east of Baku, in water depths ranging from 50 to 500 m.

bp operates Shah Deniz on behalf of its partners in the Shah Deniz Production Sharing Agreement (PSA).

Shah Deniz is structured as an unincorporated Joint Venture (JV) partnership. bp is the operator of the Shah Deniz JV. Shah Deniz Stage 1 began operations in 2006. It has the capacity to produce around 10 billion cubic meters of gas per annum (bcma) and approximately 50,000 barrels a day of condensate.

Despite the complexities of drilling the wells, building a platform, constructing an onshore terminal and laying a 700 km South Caucasus pipeline (SCP) through Azerbaijan and Georgia to the Turkish border, Shah Deniz Stage 1 was developed in only seven years. Since Shah Deniz has proved a secure and reliable supplier of gas to Azerbaijan, Georgia and Turkey.

During 2014, the existing Shah Deniz facilities were further de-bottlenecked which increased their production capacity from 27.3 million standard cubic metres to 29.5 million standard cubic metres of gas per day.

In 2018, Shah Deniz celebrated 100 billion cubic metres of total gas production from the field since the start of operations. The milestone was achieved at the end of December, exactly 12 years after the first announcement of the start-up of commercial gas production from the field and start-up of operations of the South Caucasus Pipeline.

In 2021, Shah Deniz celebrated the 25th anniversary since the signing of the Shah Deniz Production Sharing Agreement (PSA). The PSA was signed on 4 June 1996 between SOCAR and a consortium of foreign companies. It was ratified by the Milli Majlis and became effective on 17 October the same year. 

In the first half of 2025, bp and its co-venturers spent around $1,282 million in operating expenditure and around $472 million in capital expenditure on Shah Deniz activities, the majority of which was associated with the Shah Deniz 2 project.

On 3 June, the Shah Deniz consortium announced the final investment decision for the project. 
 
The $2.9 billion SDC project is designed to access and produce low pressure gas reserves in the field and maximize resources recovery. It is expected to enable around 50 billion cubic metres of additional gas and approximately 25 million barrels of additional condensate production and export from the field.
 
The project involves installation of a new compression facility – an electrically-powered unmanned compression platform, or Normally Unattended Installation (eNUI), and several associated facilities offshore in the Shah Deniz contract area. Additionally, it encompasses brownfield works to be undertaken at the Shah Deniz Alpha (SDA) and Bravo (SDB) platforms, as well as at the Sangachal terminal.
 
Construction activities are planned to commence in late 2025, with completion expected in 2029 to be ready to receive first gas for compression from the SDA platform in 2029 and from the SDB platform in 2030.

Production

During the first six months, the Shah Deniz field continued to provide gas to markets in Azerbaijan (to SOCAR), Georgia (to GOGC), Türkiye (to BOTAS), BTC in multiple locations and to buyers in Europe.

In the first half of 2025, the field produced around 14 billion standard cubic metres of gas and about 2 million tonnes (around 16 million barrels) of condensate in total from the Shah Deniz Alpha and Shah Deniz Bravo platforms.

The existing Shah Deniz facilities’ production capacity is currently about 77.2 million standard cubic metres of gas per day or approximately 28.2 billion standard cubic metres per year.