Agreement opens Shah Deniz gas export routes

Statoil says the signing of a Memorandum of Understanding earlier this week between Azerbaijan and Turkey will help advance the next development phase of the Shah Deniz project in the Caspian Sea.

Offshore staff

BAKU, Azerbaijan -- Statoil says the signing of a Memorandum of Understanding earlier this week between Azerbaijan and Turkey will help advance the next development phase of the Shah Deniz project in the Caspian Sea.

The agreement involves a change in prices for Azeri gas supplied to Turkey under Shah Deniz Phase I, and for the second-phase development, as well as the transit of Azeri gas through Turkey.

Shah Deniz Phase II is due onstream in late 2016.

Statoil has a 25.5% interest in the Shah Deniz gas field, southeast of Baku, which is thought to be Azerbaijan’s largest gas resource.

Produced gas presently is transported through the 690-km (429-mi) South Caucasus Pipeline (SCP), which stretches to the border between Georgia and Turkey.

Peak production from Phase I is projected at 8.6-9 bcm/yr (303.7-317.8 bcf/yr). Output should be increased by a further 16 bcm/yr (565 bcf/yr) under Phase II.

Statoil adds that new agreement, which will connect existing and planned natural gas transport grids in southeast Europe with Western Europe, opens the way for the Shah Deniz consortium to start negotiations with customers and proposed new pipelines such as Nabucco, Italy-Turkey-Greece-Interconnector (ITGI), and the Trans Adriatic Pipeline (TAP).

06/10/2010

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