Shah Deniz gas field output to halve against the prediction

The President of the State Oil Company of Azerbaijan (SOCAR), Rovnag Abdullayev, said the field is likely to produce a bit more than 3 billion cubic meters of gas for this year, APA-Economics reports.

He said well SDA-2 is on-line producing at present and the third well will be brought on line in the first ten days of May. The teething problems will be removed after the two pre-drilled wells are come on stream.

The Shah Deniz project went on stream on December 15, 2006 and is expected to produce 8.6 billion cubic metres of gas a year.

Technical failure was discovered in well SDA-01 in early January which resulted in gas leakage. On Jan. 14 the production was resumed for an after-repair trial. However, it was decided to shut in the well again for remedial work on Jan. 22 for complete elimination of the failure.

Shah Deniz gas is pumped to Turkey, onward to Europe through Baku-Tbilisi-Erzurum pipeline.

By the original quotas, Shah Deniz Field is planned to deliver 2.5bln cu m of natural gas to Azerbaijan for domestic use, 2.8bln cu m of gas to Turkey and 0.25bln cu m of gas to Georgia (transit tax).

BP is the 25% owner and operator of Shah Deniz, which is believed to contain 1 trillion cubic metres of gas, making it the largest gas discovery ever made by the group.

The parties to the Shah Deniz Production Sharing Agreement are BP (operator - 25.5%), Statoil (25.5%), SOCAR (10%), LUKoil (10%), NICO (10%), Total (10%) and TPAO (9%).