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Thursday, January 25, 2007

BP calls a halt to Shah Deniz output

Shah Deniz23 January 2007 - Upstream onLine - Azerbaijan's Shah Deniz gas field has halted output due to high pressure in the deposit's only producing well - the second stoppage since its launch last month, project leader BP said today. BP and the field's other operator, Norway's Statoil, launched the $4 billion project in the Caspian Sea on 15 December. However, they had to suspend production 10 days later, citing high pressure that Azeri state energy company Socar said had caused a leak. They resumed output last week. "Production at the only well of Shah Deniz has been suspended for the same reason as it was in December - rising pressure in the well," said a BP spokeswoman. She said a second well - with similar production capacity of 5.6 million cubic metres of gas and 2500 tonnes of gas condensate per day - would start production in March. The bulk of the gas from Shah Deniz is due to be exported to Turkey via Georgia along the $1 billion Baku-Tbilisi-Erzerum pipeline. Turkey has agreed to cede part of its Shah Deniz quota to Georgia, which is seeking alternative gas supplies after Russia's gas monopoly Gazprom doubled the gas price for Tbilisi for 2007 to $235 per 1000 cubic metres. Azerbaijan, Turkey and Georgia agreed in December that Tbilisi would get 1.05 billion cubic metres of the Shah Deniz gas this year and Azerbaijan would get 3.78 bcm. The Shah Deniz shareholders, which also include Russia's Lukoil, France's Total and Iranian and Turkish state companies, hope to launch three more wells in 2007 to raise output to 20 million cubic metres per day, Reuters reported.

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