Shah Deniz Stage 2 Fabrication Contracts Awarded

The Shah Deniz consortium informed that the Stage 2 project continues to progress on schedule with further major construction and supply contracts recently awarded.

The contract for the fabrication of the jackets for the two planned offshore platforms, pin piles and subsea structures has been awarded to the consortium consisting of BOS Shelf LLC, Saipem Contracting Netherlands B.V. and Star Gulf FZCO. This is one of the key contracts to progress the execute phase of the giant Stage 2 project underpinning First Gas delivery in late 2018.

The scope of work of the $750 million contract includes construction of two 8-legged single batter jackets – both 110 metres in height. The jackets will weigh 13,400 and 12,300 tonnes including the flotation tanks. In addition, the scope includes the fabrication of 2300 subsea structures with a total weight of 30,000 tonnes. In particular, the subsea fabrication scope includes eight sub-sea isolation valve structures, ten flow-line termination assemblies, 80 walking anchors, 100 subsea tie-in piping spools, 100 pipeline crossing supports, 1,000 concrete mattresses and 1,000 tonnes of current transfer zone foundations.

All construction and fabrication work under this contract will be undertaken at SOCAR’s Baku Deepwater Jacket Factory (BDJF) named after Heydar Aliyev, using local resources including workforce and construction yard facilities.

This award highlights the Shah Deniz partnership’s commitment to optimise the use of Azerbaijan’s local resources. The contract is expected to mobilise about 2750 local workforce executing around 8 million man-hours during construction work, all of which will be carried out in the country. Fabrication activities are expected to complete in 2017.

Gordon Birrell, BP’s Regional President for Azerbaijan, Georgia and Turkey (AGT), said: “We are pleased to have awarded such an important construction contract to the BOS Shelf, Saipem and Star Gulf consortium. The use of a world-class fabrication yard in Azerbaijan demonstrates the Shah Deniz consortium’s continued commitment to developing and leveraging local resources. We are also pleased that this contract underpins our plans to deploy subsea production technology in the Caspian Sea for the first time. The use of this technology in Azerbaijan will open up new opportunities for oil and gas developments, and allow the country to remain at the forefront of technological developments in our industry”.

The contract is awarded under a Master Agreement for the fabrication, transportation and installation of the offshore facilities – jackets, pipelines and subsea structures – scope for the Shah Deniz Stage 2 project.

In addition, the Shah Deniz consortium has also recently awarded a contract for the supply of the subsea production systems. The estimated value of this contract is $394 million and it has been awarded to FMC Technologies Inc. The scope of work under this contract includes the supply of equipment for the first two production clusters consisting of subsea manifolds, associated controls and connection components. Activities under this contract are expected to complete in 2017.

Contract awards for the Shah Deniz Stage 2 and South Caucasus Pipeline expansion projects will continue as part of the overall progress being made across multiple areas of this major development project.

Press Release, April 11, 2014; Image: BP

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