SCP Commissioning Commences

1 June 2006

BP, as Technical Operator of the South Caucasus Pipeline (SCP) gas export project, is pleased to announce on behalf of the SCP shareholders that the project has commenced testing and commissioning the new gas export system by filling it with gas from the Sangachal terminal. This follows the completion of the construction and hydro-testing of the pipeline and marks a significant milestone in our target to deliver first gas to market during the third quarter of 2006. 

The commissioning gas was introduced to SCP from the Sangachal terminal on May 21st, crossed the Georgian border on May 28th and has currently reached Area 72, the Georgian domestic delivery point near Gardabani. Pressure and operational testing of the facilities and equipment is currently underway. The commissioning of the remaining section of SCP to the Georgian/Turkish border will commence in August, following the introduction of gas into the Sangachal Terminal processing facilities and the marine pipelines running out to the Shah Deniz Alpha gas production platform. 

Approximately 0.1 bcm of gas will be required to commission the entire Shah Deniz/SCP export system from the Shah Deniz Platform to the Sangachal Terminal and on to the Georgian-Turkish border. The gas being used for the commissioning of the line is SOCAR’s associated gas coming from the Azeri-Chirag-Gunashli field. 

The SCP project comprises a new gas export system from Azerbaijan through Georgia to the Turkish border. It is a pipeline over 690 kilometres in length (442 km in Azerbaijan and 248 km in Georgia) and was constructed jointly with, and in the same corridor as the BTC oil export pipeline in order to minimise the environmental and social impact. The pipeline diameter is 42” and its ultimate throughput capacity will be 20 bcm per annum with the future addition of compression stations. Main line construction activities commenced in late 2004 and were completed in May 2006. 
SCP, like BTC, is buried underground along its entire length. Numerous design and safety features have been incorporated into the construction of SCP to provide many layers of protection and make it conform to the highest international standards. In addition, to ensure the safety, security and integrity of the pipeline, there will be regular security patrolling by both governmental and SCP operations staff and frequent maintenance checks by SCP pipeline technicians. 

The investors to the South Caucasus Pipeline Company are: BP (operator – 25,5%), Statoil (25,5%), the State Oil Company of Azerbaijan Republic (SOCAR – 10%), LUKoil (10%), NICO (10%), Total (10%), and TPAO (9%). The Ministry of Industry and Energy of the Azerbaijan Republic is a non-funding shareholder. 

Notes to Editors: The Shah Deniz midstream project comprises a new gas export system - the South Caucasus Pipeline (SCP) - from Azerbaijan through Georgia to the Turkish border. SCP is a pipeline 690 kilometres in length (442 km in Azerbaijan and 248 km in Georgia) constructed jointly with, and in the same corridor as, the Baku-Tbilisi-Ceyhan (BTC) oil export pipeline in order to minimise the environmental and social impact and to achieve capital and operating cost saving synergies. The pipeline diameter will be 42”. Physical construction commenced in 2004 and was completed in time allowing the commissioning to begin in May to be ready to deliver first gas to Turkey by the end of September, 2006. 
The total midstream investment is about $1.3 bn, and has been made by the South Caucasus Pipeline Company (SCPC). The funding shareholders of SCPC hold the same interests in the Shah Deniz PSA. 

SCPC has a dual operatorship with BP as the Technical Operator being responsible for construction and operation of the SCPC facilities. Statoil, as Commercial Operator, is responsible for SCPC's business development and administration. 


Further information:
Tamam Bayatly at BP’s Press Office in Baku, telephone: 994 (0) 12 599 4557