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.
Shah Deniz Alpha platform
Shah Deniz Alpha platform
The project is the second after ACG largest foreign direct investment made in Azerbaijan and as such it has further strengthened the country’s economy. The Shah Deniz 25th anniversary marked an important milestone in the new history of Azerbaijan’s oil and gas industry.
During the quarter, the Shah Deniz field continued to provide deliveries of gas to markets in Azerbaijan (to Azerkontrakt), Georgia (to GOGC), Turkey (to BOTAS), to the BTC Company in multiple locations and to buyers in Europe.
In the first half of 2022, the field produced about 13 billion standard cubic metres (bscm) of gas and more than 2 million tonnes (more than 18 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 70 million standard cubic metres of gas per day or more than 25 bcma.