Azerbaijan awards $1.5bn offshore gas contract to Italy's Saipem

By bne IntelliNews May 4, 2016

Azerbaijan's Shah Deniz II Consortium has awarded a $1.5bn contract to Italy's Saipem and local companies Bos Shelf and Star Gulf FZCO for transport and installation of deep-water subsea production systems at the offshore gas project Shah Deniz II, abc.az reported on May 3.

With a cost estimated at $25bn, Shah Deniz II is the largest offshore gas project in Azerbaijan at the moment. Through a network of interconnected pipelines that traverses Azerbaijan, Georgia, Turkey, Greece and Albania, some 16bn cubic metres (bcm) of Azerbaijani gas will be transported to Turkey and Europe starting 2019. The offshore part of the project is overseen by a consortium led by oil major BP.

The contract scope is for 2016-2022, with the option to extend it by another five years to cover the installation of remaining trees, flying leads and jumpers at the East-South, East-North and West-South subsea flanks.

“The new flagship vessel Khankendi, which is currently under construction by Baku Shipyard, will provide essential support for the installation of the Stage 2 subsea structures - the biggest subsea production system ever built in the Caspian,” Frank Wilson, BP's vice president for Shah Deniz II, said according to abc.az. “This major contract award for the installation of subsea production systems underpins our commitment to deploy new advanced subsea production technology for the first time to the Caspian as part of the Shah Deniz Stage 2 development.”

Works on Shah Deniz II and the first pipeline that takes the gas from the field to the border with Turkey are 70% complete.

Bos Shelf is a joint venture of Azerbaijani oil company Socar and the Emirati Star Gulf Fzco. It is unclear who owns the latter, as the company does not have a website. Saipem, a leading company in global drilling services, engineering, procurement, construction and installation of pipelines, has been working in Azerbaijan's section of the Caspian Sea for over a decade. The company's share of the latest contract is $1.3bn, according to energy news outlet Splash 24/7.

Related Articles

Bombardier's Swedish branch embroiled in corruption scandal related to Azerbaijani contract

The Swedish branch of Canadian aerospace multinational Bombardier is suspected of bribing its way into a $350mn contract with the government of Azerbaijan, a new investigation reveals. According ... more

Trump Org's Azerbaijan deal could open it up to prosecution, claims New Yorker

The Trump Organisation could be liable for prosecution under the Foreign Corrupt Practices Act (FCPA) for its business ... more

EBRD says 2016 net profit was around €1bn

The European Bank for Reconstruction and Development (EBRD) said it made a net profit of around €1bn in 2016, up by a quarter from the €802mn it made in ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss