BP's contracts with SOCAR-KBR for 2 new projects in Azerbaijan valued at £50M

The value of two contracts signed by BP with SOCAR-KBR LLC (a joint venture of the State Oil Company of Azerbaijan and the American KBR) for two new projects in Azerbaijan is estimated at 50 million British pounds, Report informs referring to BP-Azerbaijan.

One of the contracts involves support for the Sangachal Terminal Electrification Project (STEL), the other - for the Shah Deniz Compression (SDC) gas field compressor station project. According to BP-Azerbaijan, the contract with SOCAR-KBR LLC for the SDC project is estimated at 43 million pounds sterling and entered into force on July 1, 2025.

Work under this agreement is scheduled to be completed in 2026. The scope of work under the contract includes design, engineering and procurement for the construction of the SDC topsides, jacket and piles for the same platform, and onshore and offshore facilities (Shahdeniz Alpha, Shahdeniz Bravo and Sangachal Terminal), including integration with the subsea system, as well as preparation for installation, commissioning and operational readiness. The STEL contract is valued at GBP 7 million and also came into force on July 1.

Work under this contract is scheduled for completion in 2028. The contract covers engineering design and procurement services for the installation of a number of new equipment and modifications to existing facilities at the Sangachal Terminal site to provide a safety mechanism for the transfer of power from the electrical grid and uninterruptible power supply.

BP, SOCAR and other investors in the Sangachal Oil and Gas Terminal have approved the Sangachal Electrification Project (STEL). The project will connect the terminal to the state power grid operated by Azerenergy JSC. For this purpose, new facilities will be built both on and off-site at the terminal, including a new 220/110 kV electrical substation. It is expected that the implementation of these projects will reduce emissions from Sangachal Terminal operations by 50%. Currently, the terminal uses seven gas turbines, which are planned to be dismantled in stages after electrification, and the unused gas volume will be exported.

The STEL project, worth $230 million, will be implemented by BP. Construction work on the project is planned to begin this year and will be completed in two stages - the first in mid-2027, the second by the end of 2028.

On June 4, 2025, in Baku, the shareholders of the Shah Deniz field development project signed the final investment decision (FID) on the construction of the SDC compressor platform. The SDC project, worth $2.9 billion, is a continuation of the two previous phases of the field development. The objective of this project is to ensure the availability and production of low-pressure gas reserves at the field, which will allow the field to achieve maximum gas recovery.

The project is expected to produce and export approximately 50 billion cubic meters of additional gas and approximately 25 million barrels of additional condensate from the field. Construction of the new platform is scheduled to begin in 2025. BP intends to commission the SDC platform in 2029.