Preparations are under way for full field development at Azerbaijan's Shah Deniz gas deposit.
Rovnag Abdullayev, president of Azerbaijan's state oil company SOCAR, outlined work on Shah Deniz at the Caspian Oil & Gas Conference in Baku today.
Phase 2 of full field development at Shah Deniz will include the drilling of 30 new wells, the installation of 14 manifolds and the construction of a new platform, Rovnag Abdullayev said.
'At present, we are preparing for Phase 2 which will result in annual output of 16bn cu.m,' he said.
The SOCAR president said that gas production as part of Phase 2 was expected to begin in 2016.
The vice president for Shah Deniz Development at operating company BP Azerbaijan, Alasdair Cook, told the conference that Shah Deniz was one of the world's largest and most productive projects.
Development of Shah Deniz began in 1999, and gas production started in 2006, Alasdair Cook said.
'The current volume of gas production is 8bn cu.m, and overall reserves structure are estimated at 1,000bn cu.m.'
Alasdair Cook said that $25bn would be invested in development of the Phase 2 of full field development.
Increased production mulled
Meanwhile, gas production at Shah Deniz in 2011 may reach 10bn cu.m of gas, exceeding the peak level by 1.3-1.4bn cu.m, according to sources in the state oil company, SOCAR.
'In addition to the peak production levels of gas, the Shah Deniz field may produce 1.3-1.4bn cu.m of gas as part of Phase 1. This can be achieved by drilling new wells and improving existing ones. However, the decision on this has not been taken, as first we need to decide where additional volumes of gas will be sent,' the source said.
Additional volumes as part of Phase 1 can be supplied to European consumers. 'However, negotiations on this issue have not yet begun, as the issue of payment for gas transit through Turkey has to be settled first. Once we have completed negotiations with Turkey, we will start negotiations with European consumers. These volumes may also be offered to Russia or Iran,' the source said.
The SOCAR representative said that in 2011 the company planned to increase the volume of supplies of Azerbaijani gas to Russia from the current 3m cu.m per day to 5m cu.m.
'However, this will depend on the requirements of the Russian side and our infrastructure's technical capacity,' the source said.
The Shah Deniz project involves BP as the operator with a 25.5% share, Statoil (25.5%), SOCAR (10%), Lukoil (10%), NICO (10%), TotalFinaElf (10%), and TPAO (9%).
Rufat Abbasov
News.Az
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