Azeri Shipyard, BP Sign Vessel Construction Contract

Maritime Activity Reports, Inc.

April 23, 2014

Azeri state energy company SOCAR's shipyard and British oil major BP have signed a $378 million deal to design and build a subsea construction vessel for the Shah Deniz II gas project, BP said on Wednesday.

Azerbaijan's biggest gas field, Shah Deniz is being developed by consortium partners BP, Statoil, SOCAR and others.

Shah Deniz I has been pumping gas since 2006 and has an annual production capacity of about 10 billion cubic metres of natural gas.

The next phase, Shah Deniz II, is important for Europe in terms of providing an alternative to gas supplies from Russia's Gazprom. Shah Deniz II is expected to produce 16 bcm of gas per year from around 2019, with 10 bcm earmarked for Europe and 6 bcm for Turkey.

Construction of the multipurpose vessel is expected to be completed in April 2017 and will be used to install subsea structures over 11 years between 2017 and 2027.

It will be designed by Marine Technology Development, the ship design and development arm of Keppel Offshore & Marine.

"This new flagship vessel for the Caspian, to be built by Baku Shipyard, will provide essential support for the construction of the (Shah Deniz) Stage 2 subsea structures which will form the biggest subsea production system in the Caspian," Gordon Birrell, BP's president for the Azerbaijan-Georgia-Turkey region, said in a statement.


(Reporting by Nailia Bagirova and Margarita Antidze; Editing by Dale Hudson)

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