The Shah Deniz field offshore Azerbaijan is the first subsea development in the Caspian Sea and one of the biggest gas and condensate fields in the world. Developed in two stages, the giant offshore gas field is capable of producing up to 26 billion cubic metres (bcm) of gas a year.

Stage one development of the field with a 10bcm annual production capacity commenced operations in December 2006, while the £21bn ($28bn) Shah Deniz stage two development which is expected to produce an additional 16bcm of gas per year commenced production in June 2018. The current production capacity of the Shah Deniz field is approximately 20bcm a year.

Discovered by the SDX-01 exploration well in July 1999, Shah Deniz is the biggest gas discovery ever made by BP which operates the field with a 28.8% participating interest.

The other development partners of the field are the Turkish Petroleum Corporation (TPAO, 19%) Petronas (15.5%), SGC Upstream (6.7%), AzSD (10%), Russia’s Lukoil (10%) and Iran’s Naftiran Intertrade Company (NICO, 10%). SGC Upstream and AzSD are the subsidiaries of Azerbaijan’s state oil and gas company SOCAR.

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The gas produced by the Shah Deniz field is transported through the South Caucasus Pipeline (SCP) to Turkey via Georgia for further export to Europe. The South Caucasus Pipeline (SCP) was built and expanded as part of the Shah Deniz field development plan.

Shah Deniz field location and gas reserves

The Shah Deniz field is located in the Caspian Sea, approximately 100km southeast of Baku, Azerbaijan. The offshore field is spread over approximately 860km2 in water depths ranging from  50m to 500m.

The offshore field is estimated to contain up to 1.2 trillion cubic metres (tcm) of gas and 240 million tonnes of condensates in recoverable reserves.

Shah Deniz stage 1  development

The Shah Deniz stage one development comprises a TPG 500 drilling and production platform which is capable of processing up to one billion cubic feet (bcf) of gas and 60,000 barrels of condensate a day.

Located approximately 100km south of Baku in 105m-deep waters, the TPG 500 jack-up platform topsides weigh approximately 32,000 tonnes (t).

The gas and condensate processed at the TPG 500 platform are transported to the onshore Sangachal terminal through two separate 90km-long subsea pipelines. The diameters of the gas and the condensate pipelines are 26in and 12in respectively.

Shah Deniz stage 2 project details

The final investment decision (FID) for the £21bn ($28bn) Shah Deniz two project was taken in December 2013.

The stage two development of the offshore gas field comprises 26 subsea wells and two offshore platforms including a production and risers platform and a quarters and utilities platform.

The jacket of the production and risers (PR) platform is 105m-high and weighs approximately 13,150t. The platform comprises 12 production risers, three export risers, and a mono ethylene glycol import riser.

The topsides of the PR platform weigh approximately 15,800t and house ten flowline reception facilities, five production separators, two flash gas compressors, and three production export flowlines.

The jacket of the quarters and utilities (QU) platform stands 105m-tall and weighs approximately 12,084t. It comprises 31 J-tubes, seven utility caissons, and three J-tube caissons.

The topsides of the QU platform weigh approximately 12,400t and house living quarters to accommodate 100 people, four power generators with a combined capacity of 60MW, and subsea production equipment.

The jacket structures for both the platforms were installed at a water depth of 95m. The topsides of both platforms are connected by a bridge. The gas and condensate produced at the PR platform are transported to the Sangachal terminal through two separate pipelines.

Sangachal terminal 

The onshore Sangachal oil and gas terminal, operated by BP, is located on a 550ha-site, approximately 55km south of Baku.

It processes oil and gas produced by the BP-operated fields in the Caspian Sea as well as third-party oil from Kazakhstan and Turkmenistan.

The processing capacity of the terminal is 1.2m barrels of crude oil a day and approximately 105 million cubic metres (mcm) of gas a day which also includes associated gas output of the Azeri-Chirag-Guneshi field. The storage capacity of the Sangachal terminal facility is up to 4 million barrels.

South Caucasus pipeline

The South Caucasus pipeline was constructed as part of the Shah Deniz stage one project. The first compressor station of the pipeline is situated at the Sangachal terminal.

The 690km-long and 42in-diameter South Caucasus pipeline (SCP) runs for approximately 442km in Azerbaijan and approximately 248km in Georgia. The pipeline construction was started in 2004 and completed in 2006. The estimated investment for the pipeline project was approximately £692m ($1.3bn).

Turkey’s domestic gas pipelines were connected to the SCP at the Georgia-Turkey border and Turkey received gas from the pipeline for the first time in July 2007.

The transportation capacity of the SCP was expanded to 23bcm a year as part of the Shah Deniz 2 development. The pipeline expansion involved the construction of a new 48in-diameter pipeline loop in Azerbaijan and Georgia over a length of 428km and 59km respectively.

The Trans Anatolian Pipeline (TANAP) has been connected to the SCP at the Turkey-Georgia border and the pipeline started delivering gas produced by the Shah Deniz two project to the TANAP in June 2018.

The 1,850km TANAP will be further connected with the 878km Trans Adriatic Pipeline (TAP) at the Turkey-Greece border.

The SCP, TANAP, and the TAP form part of the 3,500km-long Southern Gas Corridor to transport gas from Azerbaijan to Europe.

Contracts awarded for the Shah Deniz field development

Technip designed the TPG 500 platform while McDermott Caspian Contractors laid the subsea pipelines in the Shah Deniz field development in stage one.

A joint-venture between Tefken and Azfen was awarded a contract worth £611m ($998m) for expanding facilities at the Sangachal terminal as part of the Shah Deniz 2 project in December 2013. The scope of the contract included the construction of the main gas and condensate processing facilities as well as the installation of gas, condensate, and mono ethylene glycol (MEG) pipelines from the offshore pipeline landing site to the terminal facilities.

A consortium of AMEC, Tefken, and Azfen bagged a £597m ($974m) contract for the fabrication and installation of the platform topsides for the platforms of Shah Deniz stage two in December 2013.

KBR was awarded a contract worth £222m ($365m) for providing engineering design support, project management, and procurement support services related to the offshore platforms and the gas processing facility at the Sangachal terminal for the Shah Deniz 2 project in December 2013.

A consortium of BOS Shelf, Star Gulf, and Saipem was contracted for the installation of platform jackets, topsides, subsea production systems in April 2014.

Wood Group Kenny received a £36m ($60.3m) contract for the engineering and project management services for the Shah Deniz 2 subsea execute phase in June 2014.

Apply Emtunga was awarded a £19m ($32m) engineering, procurement, and construction (EPC) contract for the living quarters on the offshore platform for Shah Deniz 2 in March 2014.

Bredero Shaw was awarded a £123m ($200m) contract for subsea flow-line coating and subsea export line coating for the Shah Deniz 2 project in October 2014.

FMC Technologies and OneSubsea bagged contracts to supply subsea production systems for the Shah Deniz 2 project.

Emerson was awarded a contract worth £30m ($48m) for providing the automation systems and as well as software-as-a-service (SaaS) for the Shah Deniz 2 project in 2014.

Contractors involved with the South Caucasus pipeline expansion

A joint venture between Saipem and Azfen was awarded a £436m ($735m) contract for pipeline construction for the South Caucasus pipeline expansion project in May 2014.

A joint-venture between Bechtel International and Enka was awarded a £318m ($528m) contract for the construction of South Caucasus pipeline expansion project facilities in Georgia in the same month. The scope of the contract included the construction of two 120MW compressor stations and a pressure reduction and metering station.

Chicago Bridge & Iron UK (CB&I) was awarded a £105m ($174m) contract for pipeline and facilities engineering and project management services, while Bredero Shaw International bagged a £41.5m ($70m) pipe coating contract for the South Caucasus pipeline expansion project in May 2014.