Investments in Phase 2 of Absheron field development estimated at $4.2 bln - SOCAR
BAKU. Sept 30 (Interfax) - Investments in the full-scale development project for the Absheron gas-condensate field (Phase 2) in the Azerbaijani sector of the Caspian Sea should be $4.2 billion, Babek Huseynov, Vice President of the State Oil Company of the Azerbaijan Republic (SOCAR), said.
"A significant milestone has been reached for Azerbaijan's energy sector: the full-field development project for the Absheron field has achieved the Final Investment Decision (FID) stage. The project entails an investment of approximately $4.2 billion and includes four subsea production wells, a subsea multiphase pipeline spanning roughly 142 km, and new gas processing infrastructure near Sangachal," Huseynov posted on social media.
Huseynov also specified that first gas is scheduled for 2029, with peak production expected to reach approximately 4.5 billion cubic meters per year under the full-scale development plan for the Absheron field.
"SOCAR viewed this project as more than just a shareholder. At various stages, our teams have assumed an active leadership role and, in certain areas, effectively performed the functions of an operator when necessary to meet the schedule and pave the way for the FID," Huseynov noted.
According to Huseynov, one of the key outcomes of the negotiations was the inclusion of a fourth well in the eastern part of the field, a move actively supported by SOCAR.
"The gas recovery rate over the field's entire development lifecycle is expected to exceed 60%, a figure comparable to that of leading international gas projects [...] Our goal is now clear: first gas in 2029. We anticipate that TotalEnergies should execute the project safely, on schedule, and within the agreed cost parameters," Huseynov said.
As reported, SOCAR, France's TotalEnergies, and the UAE's XRG, part of Abu Dhabi National Oil Co. (ADNOC), approved on September 26 the final investment decision to develop fully the Absheron field. The project follows the initial development phase of Absheron, where production began in 2023.
XRG said that the early production phase for the Absheron field unlocks access to gas resources totaling up to 5 trillion cubic feet, about 142 bcm.
The full-field development concept (Phase 2) involves production from four wells and the transport of hydrocarbons via a subsea multiphase pipeline to a gas processing plant-designated by TotalEnergies as the Central Processing Facility (CPF)-to be built onshore approximately 4 km southwest of BP's Sangachal terminal. At the CPF, the gas and liquid phases should be separated to meet the input specifications of the South Caucasus Pipeline (SCP). The CPF should be designed to transport 450 million cubic feet of gas and 38,000 barrels of condensate per day to the BP terminal at Sangachal. The processed gas should be exported via the SCP and supplied to Azerbaijan's domestic gas network; the daily transport volume for the domestic network is set at 225 million cubic feet.
At the plateau production stage of Phase 2, the Absheron field should yield 12.7 million cubic meters of gas per day (4.5 bcm per year) and an initial 35,000 barrels of condensate per day, in addition to the output from the first phase.
The Absheron field is located 100 km from Baku at a water depth of 500 meters. It is being developed by the Joint Operating Company of Absheron Petroleum B.V. (JOCAP).
SOCAR and TotalEnergies initially participated in the project equally, with Abu Dhabi National Oil Company (ADNOC) joining the project by acquiring a 15% stake from both SOCAR and TotalEnergies.
The contract is for 30 years and covers 747 square kilometers. Initial estimates place the field's reserves at 350 bcm of gas and 100 million tonnes of condensate.
TotalEnergies and SOCAR announced the start of gas production at Absheron on July 10, 2023, with output under the first phase reaching a peak level of 1.5 bcm in 2024. Gas produced during the first phase is intended for Azerbaijan's domestic market.
