Shah Deniz 2 takes off

With the subsea construction vessel (SCV) associated with the Shah Deniz Phase 2 natural gas development expected to hit the waters in April 2017, contracting for the project is in full swing. Two more major contracts totaling nearly US$500 million announced 23 April, marking the second set of contracts awarded this month.

BP Exploration awarded Baku Shipyard LLC a $378 million contract to develop, build and design the 5000tonne vessel, the shipyard announced. The SCV will install the subsea structures beginning in 2017 and continuing for a period of 11 years, according to Singapore’s Keppel Corporation, whose own that Marine Technology Development will be responsible for the vessel’s design.

Gordon Birrell, BP’s regional president for Azerbaijan, Georgia and Turkey, called the SCV a “flagship vessel for the Caspian…[which] will provide essential support for the construction of the Stage 2 subsea structures which will form the biggest subsea production system in the Caspian.

Keppel O&M has a 10% interest in Baku Shipyard, which is jointly developed with State Oil Company of Azerbaijan Republic (65%), and Azerbaijan Investment Company (25%). The SCV is the first major contract secured by the 62-ha yard since its inauguration late last year.

According to Keppel Corporation, the vessel will include dynamic positioning to allow for work in 2.5m significant wave height, a 750tonne-main crane able capable of subsea operations up to 600m, an 18-men two-bell diving system, two work-class remotely operated vehicles, a strengthened moon pool, and two engine rooms containing the vessel’s 6x4.4mW and 2x3.2mW engines.

Shah Deniz gas field, located in the Caspian Sea about 70km off Azerbaijan, was originally discovered in 1999. The BP-operated gas field’s consortium elected to proceed to stage 2 in December 2013 as part of an overall plan to extend supplies to Europe. Budgeted at around $28 biullion, Stage 2 of the field will carry 16bcma of gas 3500km to provide energy for consumers in Georgia, Turkey, Greece, Bulgaria and Italy.

Keppel O&M’s offshore branch, Keppel FELS, fabricated the platform and living quarters of the TPG500 self-installing jackup drilling/production/quarters platform in a contract work US$96 million.

In addition, a consortium consisting of Saipem Saipem, Bos Shelf and Star Gulf was awarded two separate contracts, one awarded 10 April in the amount of $750 million to supply the jackets, and one from 30 April, worth $1.8 billion, to transport and install the topsides.

Under the topside agreement, the group has been contracted to produce two, 8-legged, 100m-high single batter jackets. With the flotation tanks, the jackets will weigh 13,400 and 12,300 tonnes. It is also responsible for the fabrication of 2300 subsea structures weighing 30,000tonnes.

The subsea fabrication scope includes eight sub-sea isolation valve structures, ten flow-line termination assemblies, 80 walking anchors, 100 subsea tie-in piping spools, 100 pipeline crossing supports, 1,000 concrete mattresses and 1000tonnes of current transfer zone foundations. FMC Technologies will complete further subsea work, after nabbing a US$394 million contract to supply production systems for the first two platforms, consisting of subsea manifolds, associated controls and connection components.

All work will be carried out in SOCAR's Baku Deepwater Jacket Factory.

Oilfield services company Expro scored a 5-year contract worth almost $100 million to provide completion landing string equipment and services for the installation and completion of 24 new subsea wells. The company said it was one of its largest European CIS contracts to date.

Expro plans to supply its Landing String Assembly – High Pressure (ESLA-HP) 15k valves and its EXPRESS electrohydraulic control systems for quick emergency shutdown. The UK-based company said its ELSA-HP system is designed to develop fields “with challenging conditions," and is qualified up to 15,000psi, 250°F and 10,000ft water depth.

First gas for Shah Deniz Stage 2, which BP claims is one of the largest gas developments in the world, is targeted for late 2018, with 6bcma in sales bookmarked for Georgia and Turkey through the South Caucasus Pipeline and the Trans Anatolia Natural Gas Pipeline (TANAP), respectively; a further 10bcma in gas Europe will be delivered through the Trans Adriatic Pipeline (TAP) are planned to follow around one year later.

The Shah Deniz consortium consists of: BP, operator (28.8%), SOCAR (16.7%), Statoil (15.5%), Total (10%), Lukoil (10%), NICO (10%) and TPAO (9%).

Read OE's previous coverage of the Shah Deniz Stage 2 development:

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