Gas production from the third phase of the “Shah Deniz” gas-condensate field in the Azerbaijani shelf is expected to begin in 2029, Hungarian MVM, a shareholder in the project, reported to Interfax.
“Production is expected to start in 2029 with three wells, achieving an annual output of 2 bcm,” the company stated. Currently, the production capacity for the first phase is 11 bcm of natural gas per year and 60,000 bbl/day of condensate, while the second phase has a capacity of 16 bcm per year and 105,000 bbl/day of condensate.
MVM Group signed a deal to acquire 5% of the “Shah Deniz” project from Azerbaijani company Cenub Qaz Dehlizi and 4% of the South Caucasus Pipeline Company (SCPC) from Azerbaijan Gas Supply Company Limited (AGSC) on June 5, 2024, completing the transaction on August 30.
“This deal aligns with MVM’s new strategic goals, including diversifying gas supplies and reducing dependence on Russian natural gas, enabling it to generate at least 25% of EBITDA in international markets. The deal also significantly contributes to MVM’s exploration and production activities,” the company announced.
The third phase of the “Shah Deniz” development involves gas extraction from deep layers. BP increased gas production at “Shah Deniz” by 7.7% year-on-year in the first half of 2024 to 14 bcm, alongside 18 million barrels of condensate. Gas production grew by 4% to 26 bcm in 2023.
The contract for the “Shah Deniz” field was signed in Baku in 1996. Current equity participation in the contract is distributed as follows: BP plc (operator) – 29.99%; Russian company Lukoil – 19.99%; Turkish company TPAO – 19%; Azerbaijani company Cenub Qaz Dehlizi – 16.02%; Iranian company NICO – 10%; and MVM – 5%. Gas production at the “Shah Deniz” field began in December 2006.
