£436M pipeline construction contract awarded to JV


The Shah Deniz Alpha gas production platform. Photo: BP

A Saipem/Azfen joint venture has been awarded a $735M (£436M) contract for pipeline construction works on the South Caucasus Pipeline Expansion (SCPX) project, part of Shah Deniz stage 2.


Start of work is scheduled for January 2015 with mechanical completion of the Georgian section expected by the end of 2016 and the Azerbaijan section by the end of 2017.


The contract will involve construction of a 428km pipeline loop and associated above ground installations, including block valves, a pigging facility and tie-ins in Azerbaijan and Georgia. The joint venture will also build a 59km second pipeline loop and associated above ground installations in Georgia.


Appointed to carry out these works by the South Caucasus Pipeline Company (SCPC) and the Shah Deniz consortium, Saipem/Afzen is a joint venture between Saipem Contracting Netherlands BV and Azfen JV.


This award adds to the 14 contracts already announced on the Shah Deniz stage 2 project to add a further 16Bn cubic meters per year (bcma) of gas production to the approximately 9 bcma already being produced by Shah Deniz stage 1.


With most of the main contracts already awarded work has commenced on Shah Deniz stage 2 at construction sites in Baku.


BP’s Regional President for Azerbaijan, Georgia and Turkey Gordon Birrell said: “We have now awarded most of the contracts for SCPX and associated expansion facilities in Azerbaijan and Georgia.


“Both the Shah Deniz stage 2 and SCPX projects are moving ahead across all areas. Work has commenced at the fabrication yards for jackets and decks, as well as at the onshore terminal construction sites. Offshore, drilling activities continue successfully using the Istiglal and Heydar Aliyev rigs with five production wells already completed in preparation for first gas in late 2018,” he added.