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Shah Deniz Co starts development of same-named field’s 2nd stage in Azerbaijan

The project is estimated at 25 billion U.S. dollars, the company said

BAKU, April 17 (Itar-Tass) —— The Shah Deniz company will start the development of the second stage of the same-named gas field in the Caspian Sea shelf, the company said in a statement.

Under the document, the information was declared at Tuesday’s meeting between Azerbaijani President Ilham Aliyev and Robert Dudley, General Executive Director of the British Petroleum company, which is the operator of the Shah Deniz field.

The project is estimated at 25 billion U.S. dollars, the company said.

Proceeding from the statement, the decision made at the talks will allow the Shah Deniz company to keep unchanged the plans on the start of gas export at the end of 2017. “The second stage of Shah Deniz will open the Southern Gas Route, which will make it possible to supply the Caspian Sea gas to Turkey and Europe,” the document underlined.

“The start of the initial engineering and designing works means the beginning of the project’s new phase, which will allow the company to improve engineer and technical studies, drill additional wells, complete drafting of commercial agreements, and ink major construction contracts,” the company’s statement wrote.

In addition, the Shah Deniz company will complete the selection of export routes to Europe.

The launching of the Shah Deniz second stage of development will raise the gas production by 16 billion cubic metres to 25 billion cubic metres.

The second stage envisages that the Shah Deniz company will construct two floating production units, drill 26 wells from two semi-submersible drilling rigs, lay 500 kilometres of under-water pipelines in a depth of 550 metres, increase by 16 billion cubic metres the throughput capacity of the South-Caucasus gas pipeline and raise the capacity of the Sangachalsky terminal.

“Besides, the company plans to build additional gas pipelines for the transportation of gas from the Shah Deniz field to Turkey and Europe,” the statement underlined.

The Shah Deniz company considers three possible routes for gas transit to Europe, including the Trans-Adriatic Pipeline, Nabucco West and South-East European gas Pipeline (SEEP), which will deliver gas to Hungary, Bulgaria and Romania. “The company will make the final decision in 2013,” the company said.

The Shah Deniz field is located in the Caspian Sea shelf 70 kilometres of its coast. The field’s reserves are estimated at 1.2 trillion cubic metres.

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