Gas production in Stage 3 of Azerbaijan's Shah Deniz project to begin in 2029 - MVM

BAKU. Oct 30 (Interfax) - Gas production under Stage 3 of the development of the Shah Deniz gas condensate field offshore Azerbaijan will begin in 2029, Hungary's MVM, which is a shareholder in the project, told Interfax.

"It is anticipated that Stage 3 production will begin in 2029 from three wells, with an annual output of 2 billion cubic meters," the company said.

It said the current production capacity under Stage 1 was 11 bcm of natural gas per year and 60,000 boe per day of condensate, and Stage 2 was 16 bcm gas per year and 105,000 boepd condensate.

MVM Group signed a deal to buy a 5% stake in the Shah Deniz project from Azerbaijan's Cenub Qaz Dehlizi and a 4% stake in South Caucasus Pipeline Company (SCPC) from Azerbaijan Gas Supply Company Limited (AGSC) on June 5 and closed it on August 30.

"This transaction aligns with MVM's new strategic objectives, including the diversification of gas supplies and lower exposure to Russian natural gas, generating at least 25% of EBITDA on international markets. The transaction also significantly contributes to the development of MVM's exploration and production activities," the company said.

Stage 3 of the Shah Deniz field development involves gas production from deep formations.

BP raised gas production at Shah Deniz 7.7% year-on-year in H1 2024 to 14 billion cubic meters. It also produced 18 million barrels of condensate. Gas production rose 4% to 26 bcm in 2023.

The contract to develop the Shah Deniz field was signed in Baku in 1996. Equity participation in the contract is currently as follows: BP plc , operator, with 29.99%; Russia's Lukoil with 19.99%; Turkey's TPAO with 19%; Azerbaijan's Cenub Qaz Dehlizi with 16.02%; Iran's NICO with 10%, and MVM with 5%.

Gas is currently produced at the Shah Deniz field at the Alpha platform in Stage 1 and at the Bravo platform in Stage 2. Gas production from the Shah Deniz field began in December 2006.