Shah Deniz gas to Turkey

July 5, 2007, 01:30 CEST

Gas from the Shah Deniz field in Azerbaijan is now flowing to Turkey for the first time.

"This is a milestone for Statoil's international production, sale and marketing of gas from Azerbaijan," says Jan Heiberg, vice president for the group’s gas operations in Azerbaijan.

"It is also a special day for Statoil as AGSC's operator in that all buyers of Shah Deniz gas are now taking gas," he says.

BP operates the Shah Deniz field in the Azerbaijani sector of the Caspian Sea where Statoil has a 25.5% interest. Statoil is responsible for sale of phase one Shah Deniz gas, as operator for the AGSC.

Azerbaijan and Georgia already receive gas from the field, while the bulk of Shah Deniz gas is sold to Turkey.


Volumes are transported through the new South Caucasus Pipeline (SCP). The gas pipeline is 690 kilometres long and follows the same route as the Baku Tbilisi Ceyhan (BTC) oil pipeline as far as the border between Georgia and Turkey. First transport through the SCP began in the autumn of 2006.

The Turkish company Botas, buyer of the gas in Turkey, takes over transport responsibility at the Turkish border. A new pipeline has been constructed as far as the city of Erzurum, linking in with the existing Turkish gas grid.

Shah Deniz is a large gas and condensate field in an international perspective. According to the operator, phase one at peak production will have an output of around 8.6 billion cubic metres of gas annually.

Licensees in the Shah Deniz Exploration, Development and Production Sharing Agreement (EDPSA) are operator BP with a 25.5% interest, Statoil (25.5%), the State Oil Company of the Azerbaijan Republic, Socar (10%), LUKoil (10%), Nico (10%), Total (10%) and TPAO with 9%.

The AGSC is owned by operator Statoil with a 20.4% interest, BP (20.4%), the Ministry of Industry and Energy of the Azerbaijan Republic (20%), LUKOIL (8%), Nico (8%), Socar (8%), Total (8%) and TPAO (7.2%).

BP is technical operator of the SCP with a 25.5% interest. Other licensees are Statoil, which is commercial operator with a 25.5% interest, Azerbaijan SCP Ltd (10%), LUKIOL (10%), Nico (10%), Total (10%) and TPAO (9%). The Ministry of Industry and Energy of the Azerbaijan Republic is a non-funding shareholder.

Statoil also has an 8.56% interest in the Azeri Chirag Gunashli (ACG) oil field in Azerbaijan, in which Chirag was brought on stream early in 1997. In total the field produces nearly 700,000 barrels per day.