Baku: BP, as the operator of the Shah Deniz gas and condensate field development project and the Sangachal terminal, has announced the award of two substantial engineering contracts, according to Azeri-Press News Agency. These contracts, which encompass detailed engineering and procurement support services, have been awarded to the SOCAR-KBR joint venture, marking a significant progression in the Shah Deniz Compression (SDC) and Sangachal Terminal Electrification (STEL) projects.
According to Azeri-Press News Agency, the contract awards follow the Final Investment Decisions (FIDs) announced for both projects during Baku Energy Week on June 3, 2025, underscoring a pivotal milestone as they move into the execution phase. Matt Kirkham, BP vice president for projects in the Azerbaijan-Georgia-Trkiye region, Middle East, and Africa, expressed pride in the advancement of the SDC and STEL projects, highlighting the successful completion of the sourcing phase and the selection of the SOCAR-KBR joint venture due to their expertise in similar projects in the Caspian region.
The SDC contract, valued at £43 million, became effective on July 1, 2025, with completion targeted for 2026. The scope involves engineering and procurement support for the construction of topside facilities, jacket and piles for the SDC platform, onshore and offshore installations, and system design engineering for subsea integration.
The STEL project contract, valued at £7 million, has been active since June 1, 2025, with planned completion in 2028. This contract focuses on engineering and procurement support for new equipment and modifications at the Sangachal Terminal to enable grid power transmission.
The $2.9 billion SDC project is designed to enhance gas recovery from the Shah Deniz field, promising approximately 50 billion cubic meters of additional gas and 25 million barrels of condensate production. The project includes an electrically-powered compression platform and associated facilities, with construction commencing in 2025 and completion by 2029.
The STEL project will connect the terminal to Azerbaijan’s national grid, facilitating the removal of gas turbines and reducing operational emissions. Construction for the $230 million STEL project has begun, with completion expected in two stages by the end of 2028.