Infrastructure under consideration includes a new, 690-km pipeline through Azerbaijan and Georgia to the Turkish border and an offshore platform in the Caspian Sea. The Turkish government also is considering building an LNG plant.
"We're still looking at end-October, there are a number of issues to consider," a company spokesman says. BP's David Woodward, head of the company's operations in Azerbaijan, said Thursday that the project partners were in talks to review "the concept of Shakh Deniz," according to Agence France Presse.
BP is not questioning the project's overall viability. "It's about the timing for gas deliveries (to Turkey)," the spokesman says. Partners are concerned about the project's expected total price tag, which has now risen to over $3 billion, he says.
The nature of the planned upstream development, the timing of the entry of Shakh Deniz gas into the Turkish market and the financing of Azeri state oil company Socar's share in the project were also issues under discussion, the spokesman says. Construction contracts for the planned field development, including an offshore platform, have not yet been awarded.
Azerbaijan and Turkey have already signed a government-to-government agreement on the gas export project, but specific sales and purchase contracts will not be concluded until after the formal project sanction is given, the BP spokesman says. Woodward said last month that BP was hoping to start building a pipeline for the gas in 2004, with first exports to start in 2006.
This timetable is dependent on Turkey providing guarantees that it will import fixed volumes of gas through the pipeline. Turkey, which has also agreed major deals to import gas from Iran and Russia in recent years, is facing a potential gas surplus once all the exports start flowing. A senior government official said in July that the country was considering the possibility of building a gas liquefaction plant to export future surplus gas supplies to overseas markets as LNG.he $3-billion-plus project to export gas from the Caspian Sea Shakh Deniz field offshore Azerbaijan to Turkey remains on track for final approval at the end of October, according to BP plc.