Azerbaijan's parliament ratifies document on gas production from deep reservoirs at ACG block

BAKU. Nov 29 (Interfax) - Azerbaijan's parliament on Friday ratified a second addendum to the September 14, 2017 production sharing agreement on the project to enable production of gas from deep reservoirs at the Azeri-Chirag-Gunashli block.

Presenting the document, Sadig Gurbanov, chairman of the parliament's Natural Resources, Energy and Ecology Committee, said the addendum concerned production of non-associated gas and liquid hydrocarbons at the ACG block, which had not yet been carried out under the current PSA.

The signatories to the addendum must make final investment decisions on drilling appraisal wells, conduct marketing, prepare and submit comprehensive development programs for approval by the State Oil Company of the Azerbaijani Republic (SOCAR), and take certain measures to ensure initial production within the deep gas project.

The shareholders of the project to develop the ACG block signed a second addendum to the September 14, 2017 PSA on September 20 this year.

Under the addendum, the companies will move ahead with the exploration, appraisal, development and production of non-associated gas at the block.

The addendum is effective until the end of the existing PSA in 2049. The participating interests of the parties in the deep gas project are the same as in the existing PSA. BP is still the project operator.

BP expects to produce the first non-associated gas at the block at the block in early 2025. ACG non-associated gas resources are believed to be up to 4 trillion cubic feet or around 112 billion cubic meters in place.

Production will initially total about 0.5 bcm per year. Gas from the first well will be sold to SOCAR.