BAKU, Azerbaijan, August 6. bp, as operator of the Shah Deniz gas and condensate field development project and the Sangachal terminal, is pleased to announce the award of two major engineering contracts, Trend reports via bp.
These contracts - covering detailed engineering and procurement support services - have been awarded to the SOCAR-KBR joint venture and represent a significant step forward in the execution of the Shah Deniz Compression (SDC) and Sangachal Terminal Electrification (STEL) projects.
The contract awards follow the Final Investment Decisions (FIDs) announced for both projects during Baku Energy Week on 3 June 2025, marking a key milestone in the progress into the execute stage.
Matt Kirkham, bp vice president, projects, for the Azerbaijan-Georgia-Türkiye region, Middle East and Africa, said: “I am proud to share a significant milestone in the advancement of the SDC and STEL projects. Following the FIDs in early June, we have successfully completed the sourcing phase and awarded key contracts to the SOCAR-KBR joint venture. Their proven expertise in similar Caspian region projects, including the successful delivery of previous SDC project scopes, was a decisive factor in this selection.
“A heartfelt thank you to everyone whose dedication and hard work have made this achievement possible. I look forward to the continuing partnership that will deliver both projects safely, competitively and on schedule.”
The SDC contract, valued at £43 million, has been effective since 1 July 2025. The work under this contract is planned to be completed in 2026.
The scope of work includes engineering and procurement support for the construction of the following facilities, including readiness for installation, commissioning and operational readiness:
Topside facilities for the SDC platform;
Jacket and piles for the SDC platform;
Onshore and offshore brownfield installations (Shah Deniz Alpha,
Shah Deniz Bravo, and Sangachal Terminal;)
System design engineering for integration with the subsea
system.
The STEL project contract, valued at £7 million, has been effective since 1 June 2025. The work under this contract is planned to be completed in 2028.
This contract covers engineering and procurement support services for a number of new equipment, and a series of brownfield modifications inside the Sangachal Terminal to enable grid power transmission and ride through protection.
The $2.9 billion SDC project is designed to access and produce low pressure gas reserves in the Shah Deniz field and maximize resources recovery. The project is expected to enable around 50 billion cubic metres of additional gas and approximately 25 million barrels of additional condensate production and export from the field.
The project involves installation of a new compression facility – an electrically-powered unmanned compression platform, or Normally Unattended Installation (eNUI). With four 11-MW compressors onboard, the SDC platform is designed to serve as a host facility for gas compression from both the Shah Deniz Alpha (SDA) and Shah Deniz Bravo (SDB) platforms, meaning that before flowing to the Sangachal terminal onshore, export gas from the platforms will be compressed at SDC. The project also includes several associated facilities to be installed offshore in the Shah Deniz contract area, and additional brownfield works to be undertaken at SDA, SDB, and the Sangachal terminal.
Construction activities are planned to commence in 2025, with completion expected in 2029 to be ready to receive first gas for compression from the SDA platform in 2029 and from the SDB platform in 2030. These activities will take place in-country utilizing local resources and creating up to 4,000 jobs.
The STEL project will enable the terminal to connect with the national grid of Azerbaijan, via new facilities to be built both within and outside the terminal, including a new 220/110 kV electricity substation.
The terminal currently uses seven gas turbines to generate the power it needs. Following the electrification, the turbines will be removed in phases, freeing up the fuel gas for export and enabling to reduce the operational emissions from the biggest facility bp operates in Azerbaijan.
Construction activities for the $230 million STEL project have already commenced with completion expected in two stages – Stage 1 in mid-2027, and Stage 2 by the end of 2028.