BP signs two contracts with Azerbaijani-Turkish joint venture

Mar 06, 2002 01:00 AM

BP signed two contracts with the Azerbaijani-Turkish joint venture AzFen/Tekfen on February 20 covering the expansion of the Sangachal oil terminal south of Baku. The first contract is worth $ 8 mm and covers site preparation for construction of a main crude- and gas-processing terminal. It involves the clearing of some 1.3 mm square meters, the excavation of some 650,000 cm of soil, the erection of 7,200 meters of fencing and the construction of 2,750 meters of access road. Work on this contract began in January.
The second contract covers construction of the main terminal and is worth $ 70 mm. It calls for the construction of a variety of control buildings, equipment rooms, switching rooms and warehouses. Around 2,500 tons of equipment will be erected or installed. Work is to begin in March of 2002 and finish by September of 2004. Together, the contracts will generate more than 1,000 employment opportunities for Azerbaijani nationals.

The expanded Sangachal terminal is designed to cope with the increase in crude production from the offshore Azeri-Chirag-Guneshli (ACG) oilfields and also process natural gas produced from the offshore Shah-Deniz field. BP is operator of both concessions.
Future crude production from ACG (owned by the Azerbaijan International Operating Company, or AIOC) will be exported via the Baku-Tbilisi-Ceyhan (BTC) pipeline, construction of which is expected to get underway this summer. A pipeline designed to carry Shah-Deniz gas to Turkey will run parallel to the BTC as far as Erzurum in Turkey, where it will link up with Turkey's domestic gas distribution network. Both pipelines will originate at the Sangachal terminal.

Two other contracts related to the terminal are due to be awarded in the coming months. One contract pertains to Phase One development of the ACG oilfields and calls for the construction of crude storage tanks with a capacity of 800,000 barrels. The other contract covers design, fabrication and construction of a gas dew point control unit for the Shah-Deniz project.
When complete in the coming years, the oil terminal will have a capacity to handle 1.2 mm bpd, making it a facility of international standing. The cost of the terminal is put at around $ 345 mm, and the AIOC and the partners in the BTC sponsor group, plus the partners in the Shah-Deniz concession, will share in the capital investment.

Source: NewsBase
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