Signing ceremony of Final Investment Decision on Shah Deniz-2 project held

Today a signing ceremony of the final investment decision (FID) for the Stage 2 development of the Shah Deniz gas field in the Azerbaijani sector of the Caspian Sea was held at the Heydar Aliyev Centre in Baku.The President of the Republic of Azerbaijan Ilham Aliyev, First Lady Mehriban Aliyeva, and Vice-president of the Heydar Aliyev Foundation Leyla Aliyeva attended the event. The President of the Republic of Azerbaijan Ilham Aliyev, Prime Minister of Albania Edi Rama, Prime Minister of Bulgaria Plamen Oresharski, Prime Minister of Georgia Irakli Garibashvili, Prime Minister of Croatia Zoran Milanovic, President of Montenegro Philip Vuyanovic, Foreign Minister of the United Kingdom of Great Britain and Northern Ireland William Hague, Foreign Minister of Italy Emma Bonino, Minister of Energy and Natural Resources of Turkey Taner Yıldız, EU Energy Commissioner Günther Oettinger, Acting Assistant to the US Energy Minister Jonathan Elkind, SOCAR President Rovnag Abdullayev, BP CEO Robert Dudley delivered speech at the event.

The documents were signed following the speeches. “The Memorandum of Understanding on cooperation in realizing the Southern Gas Corridor in the Southeastern Europe between the Republic of Azerbaijan, the Republic of Albania, and the Republic of Croatia” was signed by Azerbaijan’s Energy Minister Natig Aliyev, Albanian Energy and Industry Minister Damian Gjiknuri, Croatian Economy Minister Ivan Vrdoljak, and Economy Minister of Montenegro Vladimir Kavaric. The Final Investment Decision on Shah Deniz-2 project was signed by SOCAR President Rovnag Abdullayev and BP's Regional President for Azerbaijan, Georgia and Turkey Gordon Birrell.

The final investment decision (FID) triggers plans to expand the South Caucasus Pipeline through Azerbaijan and Georgia, to construct the Trans Anatolian Gas Pipeline (TANAP) across Turkey and to construct the Trans Adriatic Pipeline (TAP) across Greece, Albania and into Italy. Together these projects, as well as gas transmission infrastructure to Bulgaria, will create a new Southern Gas Corridor to Europe.

Shah Deniz reserves are estimated at 1.2 trillion cubic meters of gas. 16 billion cubic meters per year of gas will be produced from the Shah Deniz field, 6 billion of which will be transported to Turkey and 10 billion to Greece, Bulgaria and Italy via Georgia and Turkey. First gas is targeted for late 2018, with sales to Turkey. SOCAR and the Shah Deniz partners have also agreed terms for extending the Shah Deniz Production Sharing Agreement up to 2048. The Shah Deniz partners have agreed to undertake exploration and appraisal work on prospects within the PSA area.

Coincident with the FID, SOCAR purchased 6.7 per cent equity in Shah Deniz and the South Caucasus Pipeline from Statoil, and BP purchased 3.3 per cent equity in Shah Deniz and the South Caucasus Pipeline from Statoil. Both of these transactions are subject to conditions that are expected to be satisfied in 2014. The Shah Deniz co-venturers are (after acquisitions): BP, operator (28.8 per cent), SOCAR (16.7 per cent), Statoil (15.5 per cent), Total (10 per cent), Lukoil (10 per cent), NICO (10 per cent) and TPAO (9 per cent).