BP signs two contracts for new projects in Azerbaijan

SOCAR-KBR LLC, a joint venture between the State Oil Company of Azerbaijan (SOCAR) and the American KBR, has signed two contracts with BP for two new projects in Azerbaijan, reads a message from KBR, Report informs.

"KBR announced today that its joint venture with SOCAR, SOCAR-KBR LLC, has been awarded two contracts by BP for Azerbaijan – one to support the Sangachal Terminal Electrification (STEL) project, Azerbaijan’s largest oil and gas reception terminal, and another for the Shah Deniz compression (SDC) gas field project.

Under the terms of the contracts, SOCAR-KBR will provide detailed engineering design solutions and procurement services for both projects. SKLLC previously completed the project FEED for the STEL project, and the pre-FEED and FEED for the SDC project. This additional work reflects BP’s continued confidence in SOCAR-KBR’s delivery excellence," reads the message.

The value of the contracts is not disclosed. More than 95% of the SOCAR-KBR Baku-based team is composed of Azerbaijani engineers, designers, and other professionals. The SOCAR-KBR Baku office will deliver this project with the expertise of local subject matter experts with support from KBR’s global team.

“KBR has been delivering world-scale energy solutions in the region for over three decades, and these projects mark a significant step in Azerbaijan’s clean energy security objectives,” said Jay Ibrahim, President, KBR Sustainable Technology Solutions. “The Sangachal terminal, which was designed by KBR and serves as a vital link between Azerbaijan and the rest of Europe, will enable the country’s transition to national grid supply and reduce emissions. The Shah Deniz compression project marks the next stage in the evolution of delivering safe and efficient solutions.”

BP, SOCAR, and other investors in the Sangachal Oil and Gas Terminal have approved the Sangachal Terminal Electrification (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 the terminal premises, including a new 220/110 kV electrical substation.

The implementation of these projects is expected to reduce emissions from Sangachal Terminal operations by 50%. The terminal currently 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. It is planned that construction work on the project will 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 $2.9 billion SDC project is a continuation of the two previous phases of the field development.

The purpose of this project is to ensure the availability of low-pressure gas reserves at the field and ensure their production, which will achieve maximum gas recovery from the field. The project is expected to produce and export about 50 billion cubic meters of additional gas and about 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.