The Shah Deniz consortium has recently awarded three significant offshore contracts valued at around US$700mn for the next phase of the Shah Deniz Compression (SDC) project.
These contracts, granted to the Saipem/BOS Shelf joint venture, will play a crucial role in expanding the capabilities of the Shah Deniz gas field, one of the world’s largest offshore gas reserves.
The work covered by the new contracts includes the transportation and installation of a 19,000-tonne compression platform, set to be placed in the Caspian Sea. Additionally, the project will involve the construction and installation of approximately 26 km of offshore pipelines, which will link the new compression facility with existing infrastructure at the Shah Deniz field.
Onshore activities will take place at the Baku Deep Water Jacket Factory, operated by BOS Shelf, while offshore construction will be carried out using two of Azerbaijan’s flagship vessels: the Khankendi subsea construction vessel, owned by the Shah Deniz consortium, and the Israfil Huseynov pipelay barge, owned by Azerbaijan Caspian Shipping Company (ASCO). Both vessels will be operated by Saipem, under the terms of the contracts.
According to Matt Kirkham, BP’s Vice President of Projects for Azerbaijan, Georgia, and Turkey, said, “With the award of these new contracts for major construction and installation works, we are making significant progress on the SDC project. The contracts will fully leverage local fabrication yards and infrastructure, engaging the local workforce. This once again demonstrates that Azerbaijan possesses world-class onshore fabrication and offshore installation capabilities that fully meet international standards. Just one example – between 2026 and 2028, a total of 3,040 tonnes of subsea structures will be fabricated and installed as part of the SDC project. It’s a remarkable piece of activity that highlights the scale and ambition of what we are delivering. I would like to thank everyone who was involved in finalizing these important contracts.”
Offshore work is expected to begin in the third quarter of 2026, with the overall project slated for completion in 2029. This ambitious US$2.9bn project aims to access and produce low-pressure gas reserves, with a target of adding 50 bn cubic metres of gas and 25mn barrels of condensate to the Shah Deniz output.
The new compression facility will be located about 3 km from the existing Shah Deniz Bravo platform in 85 metres of water. Equipped with four 11-MW compressors, the facility will be integral in compressing gas from the Shah Deniz Alpha and Bravo platforms before it is transported to the Sangachal terminal for export.
With construction set to wrap up by 2029, the SDC project will position the Shah Deniz field as a vital player in the global energy market for years to come.
