BP-led consortium has announced that it has entered into 25-year gas supply agreements valued at more than US$100bn for its Shah Deniz field in Azerbaijan
According to the British oil and gas major, the contracts also provide a significant step forwards as the consortium moves towards a final investment decision for the Shah Deniz II project planned by the end of 2013.
The project, which lies some 70km offshore in the Azerbaijan sector of the Caspian Sea, is expected to include two new bridge-linked production platforms; 26 subsea wells to be drilled with two semi-submersible rigs; 500km of subsea pipelines built at up to 550m of water depth.
Alasdair Cook, vice president for the Shah Deniz project at BP, said that nine buyers had agreed to 25-year contracts for the field that will produce more than 10bn cubic metres of gas annually in its second phase starting 2019.
Cook added, “The gas contracts signed are sensitive to market demands within Europe. The way we sell the gas recognises the needs of the countries and the companies that we are selling gas to.”
Around two billion cubic metres of gas will be supplied to Bulgaria and Greece, with around eight billion cubic metres intended to supply Italy and adjacent market hubs, BP added.
The buyers are reportedly Axpo Trading AG, Bulgargaz EAD, DEPA Public Gas Corporation of Greece SA, Enel Trade SpA, E.ON Global Commodities SE, Gas Natural Aprovisionamientos SDG SA, GDF SUEZ SA, Hera Trading srl and Shell Energy Europe Limited.
