Shah Deniz 2 Gas Field To Begin Production By Year’s End

As construction of the Southern Gas Corridor mega-pipeline project nears completion, the State Oil Company of Azerbaijan Republic (SOCAR) announced a timeframe for when natural gas will begin to be extracted from the corridor’s primary source, namely the Shah Deniz 2 gas and condensate field located beneath the Caspian Sea.

According to a report by Trend news agency, SOCAR representatives told Natural Gas World magazine that by the fall of this year, possibly in September, Shah Deniz 2 will start to feed the 3,500 km (2,175 mi) pipeline that extends from the western shores of the Caspian to southern Italy, traversing seven countries.

Shah Deniz 1, however, which has been in operation since 2006, will begin to feed the first two segments of the three-segmented corridor – namely the South Caucasus Pipeline (SCP) and the Trans-Anatolian Pipeline (TANAP) - earlier in the year, possibly by July. The SCP runs from Azerbaijan, through Georgia, and into far eastern Turkey, where it turns into TANAP. That pipeline runs the entire length of the country from east to west, before connecting to the Trans-Adriatic Pipeline (TAP), which traverses Greece and Albania before dipping beneath the Adriatic Sea and connecting to Europe’s power grid via southern Italy.

Shah Deniz 2 is expected to add 16 billion cubic meters (bcm) of gas per year to the approximately 9 bcm already produced by Shah Deniz 1. Of these, 6 bcm will be absorbed by Turkey through TANAP, while the remaining 10 bcm will move westward to Europe and is expected to supply about 10 million households, starting in 2020.

BP, the main operator of Shah Deniz 2, announced last week that extraction of an additional 2 bcm of what has been dubbed “blue fuel” is planned for some time in 2019, which will be sold to Turkey.

“It is expected that the supply of gas from Azerbaijan to Turkey will reach 8.5 billion cubic meters in 2019, as compared to 6.5 billion cubic meters in 2017,” BP said, according to Trend. “However, in 2021, the volume will be increased to 12.5 billion cubic meters.”

Shah Deniz 2 is expected to produce gas for Europe for 25 years, supplying it until 2044.

According to U.S. government data, Azerbaijan possesses the world’s 27th largest natural gas reserves, while Caspian neighbor Russia ranks number 1, followed by Iran at number two and Turkmenistan at number six, and Kazakhstan at 15.

Although Azerbaijan has the least amount of proved natural gas reserves out of the five Caspian states, it will be the sole source for feeding the corridor – at least for the time being. Turkmenistan, which does not have many options for its gas exports and is heavily dependent on China for its sales, is expected to join the project at some point in the future.