Cost of Shakh-Deniz stage-2 development reached $28 billion

The partners developing Azerbaijani offshore gas condensate field Shakh-Deniz plan to start implementation of the Shakh-Deniz Stage-2 project, which is estimated at $28 billion, as soon as possible, Rovnag Abdullayev, President of State Oil Company of Azerbaijan (SOCAR), said at the Caspian Forum in Istanbul, which was broadcasted live by Caspiantv.net.

He said 16 billion cub.m. of gas a year will be extracted during the Stage-2 project. Of this amount 6 billion cub.m. of gas is planned to be delivered to the Turkish local market and the remaining 10 billion cub.m. is planned to be exported to Europe.

Abdullayev added that Azerbaijan is not going to limit itself only with this volume of export in the future. We are going to put into operation such big fields as Absheron, Babak and develop deep gas beds from the Azeri-Chirag-Guneshli bloc of fields.

He said by 2025 Azerbaijan's export potential will total as minimum 40-50 billion cub.m. of gas and majority of it will be transported to Europe and Turkey.

* Earlier Stage-2 project for development of Shah-Deniz field was estimated at $20 billion. However, in April 2012 after the meeting between BP President Robert Dudley and Azerbaijani President Ilham Aliyev in Baku, BP-Azerbaijan company announced cost of the Shah-Deniz Stage-2 project at $25 billion. One of the reasons of the growing cost of the project is construction of a new gas pipeline in Azerbaijan. However, after six more months cost of the project has increased by $3 billion more. The project has not been authorized yet and approval of the Shah-Deniz Stage-2 project is expected only by mid-2013. By that time the cost may grow up to $30 billion.-0--