BP-led group awards $841m contracts for Azerbaijan's Shah Deniz

A consortium led by British oil company BP has awarded construction and engineering contracts worth $841 million for the Shah Deniz II gas project in Azerbaijan, the consortium said in a press release.

Azerbaijan's biggest gas field, Shah Deniz is being developed by consortium partners BP (BP.L), Statoil (STL.OL), Azeri state energy company SOCAR and others, offering an alternative gas supplier for Europe as the continent tries to reduce reliance on Russian energy.

Shah Deniz I has been pumping gas since 2006 and has an annual production capacity of about 10 bcm of natural gas.

Shah Deniz II is expected to produce 16 bcm of gas per year from around 2019, with 10 bcm earmarked for Europe and 6 bcm for Turkey.

The Shah Deniz consortium said the contracts included a $528 million contract for the construction and commissioning of support facilities in Georgia, including an access road and compressor stations.

This has been awarded to the Bechtel Enka joint venture which is comprised of Bechtel International Inc. and ENKA İnsaat ve Sanayi A.S.

Another contract worth $174 million for pipeline and facilities engineering and project management has been awarded to Chicago Bridge & Iron UK Limited (CB&I).

Four more contracts with a total cost of $139 million for subsea and pipeline engineering, procurement and construction of the shaft, tunnel and offshore platform living quarters and drilling, were awarded to Wood Group Kenny Limited (WGK), Apply Emtunga, DrillTec GmbH and CSM Bessac.

The Shah Deniz consortium signed a $974 million contract in December with a consortium including Turkish construction firm Tekfen Insaat (TKFEN.IS) to build two offshore platforms for the project.

"The timely award of the contracts, and the quality of the companies that will be working with us on Shah Deniz and South Caucasus Pipeline, give us confidence that these important projects can be delivered on time and on budget, allowing first gas in late 2018," Gordon Birrell, BP's president for the Azerbaijan-Georgia-Turkey region said.

(Reuters)

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