On 5 June 2024, Southern Gas Corridor CJSC (“SGC”) entered into a sale and purchase agreement with MVM Group (owned by the Republic of Hungary) for the sale of a 5% stake in the Production Sharing Agreement for Shah Deniz offshore gas-condensate field in the territory of Azerbaijan and a 4% stake in Azerbaijan Gas Supply Company Limited (“AGSC”), the exclusive special-purpose vehicle established for the marketing and sale of natural gas produced from Shah Deniz gas-condensate field. The agreement was signed during Baku Energy Week.

The Shah Deniz is one of the world’s largest natural gas-condensate fields and was discovered in 1999. The field is located on the deepwater shelf of the Caspian Sea, approximately 70 km southeast of Baku. The Shah Deniz project is set up as an unincorporated joint venture partnership operated by bp.

Shah Deniz facilities can produce up to 29 billion cubic meters of natural gas and roughly 60 million barrels of condensate annually. The field has significant hydrocarbon reserves and has been producing reliably and steadily for almost 20 years. A total of more than 218 billion cubic meters of natural gas and 371 million barrels of condensate have been produced from the field since inception.

SGC is pleased to welcome MVM Group into the Shah Deniz Production Sharing Agreement to cooperate alongside other leading global energy companies including bp (29.99%), Lukoil (19.99%), TPAO (19%) and NICO (10%) in the unincorporated joint venture.

The transaction is a further testament to Azerbaijan’s key role in European energy security aimed at long-term cooperation and marks the entry of a new energy player in Azerbaijani oil & gas market. The closing of the transaction is expected to take place in Q3’2024 after the satisfaction of customary conditions precedent. Following the closing of the transaction, SGC will hold a 16.02% participating interest in the project.

SGC is the entity holding, managing and financing the participating interests of the Republic of Azerbaijan in the Southern Gas Corridor projects. It was incorporated pursuant to Presidential Decree No. 287 dated 25 February 2014. 51% of shares in SGC’s share capital is held by the Ministry of Economy of the Republic of Azerbaijan, while 49% of shares is owned by SOCAR.