The Board of Directors of the European Bank for Reconstruction and Development (EBRD) will consider provision of a loan to LUKOIL Overseas Shah Deniz Ltd (“LOSD”) to extend additional financing for its share in the second stage of the development of Shah Deniz, an offshore gas exploration and production project in Azerbaijan, said the message on EBRD’s website.
The amount of financing is up to $100 million.
The project includes two additional bridge-linked offshore gas platforms, 26 subsea wells, 500km of subsea pipelines, and the expansion of Sangachal Terminal.
The total volume of financing for LUKOIL’s share in Shah Deniz 2 project is $3 billion.
LUKOIL has a 10-percent share in the Shah Deniz project.
The contract for development of the Shah Deniz offshore field was signed on June 4, 1996. The field’s reserve is estimated at 1.2 trillion cubic meters of gas. The shareholders are: BP, operator (28.8 percent), AzSD (10 percent), SGC Upstream (6.7 percent), Petronas (15.5 percent), Lukoil (10 percent), NICO (10 percent) and TPOC (19 percent).
As part of the implementation of the Shah Deniz 2 project, the annual gas production volume will increase from 9 billion cubic meters to additional 16 billion cubic meters.
The cost of the second stage of the field’s development is estimated at $25 billion. It is planned to get the first volumes of gas within the project in 2018 and it will be the main source for the Southern Gas Corridor project, which envisages transportation of gas to Turkey and European markets.
Azerbaijan became a member of EBRD in 1992.