BAKU

British oil major BP handed over technical operatorship rights of the South Caucasus Pipeline Company (SCPC) to SOCAR Midstream Operations Limited, a subsidiary of Azerbaijan’s state energy firm, a move which had been agreed a few years ago and aimed at boosting SOCAR’s role as an operator of energy projects in the oil-rich ex-Soviet country.

SCPC operates the South Caucasus Pipeline, one of the four segments of the Southern Gas Corridor, designated to export natural gas from Azerbaijan via Georgia to Turkey and Europe.

The transfer of technical operatorship was carried out in fulfilment of the agreement between SOCAR and BP, signed in December 2013.

“After six years of successful commercial operatorship of the South Caucasus Pipeline Company, SOCAR now takes over the technical operatorship of SCPC. This is yet another tremendous achievement for the Azerbaijani state company to operate the international gas pipeline,” Rovnag Abdullayev, SOCAR president, said.

“South Caucasus Pipeline is one of the key sections of the Southern Gas Corridor aimed at boosting Azerbaijan’s gas exports, supporting energy security, supply diversification and decarbonization goals in Turkey and Europe.”

“South Caucasus Pipeline is a critical part of the Southern Gas Corridor which for the first time delivers Caspian energy resources to European markets and therefore it is important that we continue to work together to ensure its safety, efficiency and long-term reliability,” Gary Jones, BP’s regional president for Azerbaijan, Georgia and Turkey, said.

Azerbaijan started supplying commercial natural gas to Europe from the second stage of the Shah Deniz project via its $40-billion Southern Gas Corridor in December 2020, when the corridor’s last part, the Trans-Adriatic Pipeline (TAP), became operational. Europe is a highly lucrative new market for Azerbaijan, as the continent is seeking to diversify its supply away from Russia, on which it still depends for 34 percent of its gas.

A total of 400 million standard cubic feet (90,000 barrels) of gas per day will be added to current production levels, enabling Shah Deniz II to increase overall production to well over 2.4 billion standard cubic feet per day.

Azerbaijan’s goal is to eventually supply the European market with 10 bcm of gas a year, including 8 bcm to Italy and a combined 2 bcm to Greece and Bulgaria. This year, the country plans to export 5 bcm to Europe and over 12 bcm to Turkey.

Apart from BP and Azerbaijan’s state energy firm SOCAR, participants in the Shah Deniz consortium are Turkey’s TPAO, Malaysia’s Petronas, Russia’s Lukoil, Iran’s NICO and SGC Upstream.

To date, the field has produced more than 140 bcm of gas and more than 33 million tonnes of condensate.