Shah Deniz project (SD)

Production Sharing Agreement (PSA) for exploration, development and production of Shah Deniz prospective area in the Azerbaijani sector of the Caspian Sea was signed between SOCAR and international oil and gas companies on 04 June 1996. To date under Shah Deniz Stage 1 project (“SD1”) 11 out of 12 wells have been drilled, a platform, Sangachal terminal constructed and South Caucasus Pipeline (“SCP”) of 692 km in length laid to Turkey. Natural gas from the Shah Deniz field is transported via subsea pipelines to the Sangachal Terminal located on the coast of the Caspian Sea 55 kilometres south of Baku. From the Sangachal Terminal’s gas processing facilities gas is then transported to SOCAR’s pipeline, which is connected to Azerbaijan’s national grid system while the remaining gas is exported via SCP. First gas sales started in 2006.

Full-field development of Shah Deniz gas-condensate field or Shah Deniz Stage 2 (“SD2”) is one of the largest and most complex gas projects in the world and the first subsea infrastructure in the Caspian Sea. SD2 project added 16 billion m3 of gas per annum and up to 105 thousand barrels of condensate per day to about 11 billion m3 of gas per annum and 60 thousand barrels of condensate per day of production capacity under SD1 project. 6 bcm of gas produced from SD2 will be supplied to Turkey per annum, while 10 bcm per annum to the European consumers, thereby serving strategic interests related to sustainable energy security of the European countries and Turkey.

Gas Sales Agreements were signed between Shah Deniz Consortium and 9 European Companies on 19 September 2013. The Final Investment Decision was made on 17 December 2013. Commercial gas deliveries to Turkey and Europe commenced on 30 June 2018 and 31 December 2020, respectively.

Find out more about the Shahdeniz project

859.8 km2
Gas: over 1 trillion m3 (40 tcf) Condensate: 2 billion barrels
First gas exports (SD2)
Turkey: 2018 Europe: 2020
Number of Wells
SD1: 12 SD2: 26
SD1 production capacity Gas: 11 bcma Condensate: up to 60 mbd SD2 production capacity Gas: 16 bcma Condensate: up to 105 mbd
BP: 29.99% TPAO: 19% SOCAR: 14.35% Lukoil: 19.99% NICO: 10% SGC: 6.67%