BAKU
British oil major BP plans to increase its stake in the Shah Deniz gas project in Azerbaijan to 29.99 percent by acquiring a 1.16 percent share from Malaysia’s Petronas.
BP said that it had acquired the stake from Petronas for $168 million based on the same commercial terms of the Shah Deniz transaction announced earlier by Petronas.
The BP-led consortium, which is developing the Shah Deniz project, has been pumping gas from the giant offshore field’s first phase since 2006, delivering more than 10 billion cubic metres (bcm) a year of gas to Azerbaijan, Georgia and Turkey. The second phase started its output in 2018, adding 16 bcm of gas production capacity at its peak to bring total capacity to 26 bcm.
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.
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.
Exports from Shah Deniz to Turkey amounted to 7.833 bcm in the first nine months of 2021 for $1.2 billion, exports to Georgia totalled 2.262 bcm for $282 million, to Europe – 4.663 bcm for $1.5 billion.
Apart from BP and Azerbaijan’s state energy firm SOCAR, participants in the Shah Deniz consortium are Turkey’s TPAO, Russia’s Lukoil, Iran’s NICO and SGC Upstream.