Southern Gas Corridor: Delivery of Gas to Europe through

BP AND ITS PARTNERS ANNOUNCED THE STARTUP OF SHAH DENIZ 2 ON JUNE 30, 2018, INCLUDING ITS FIRST COMMERCIAL GAS DELIVERY TO UTILIZING NEW PIPELINE, COMPRESSOR STATIONS, AND METERING FACILITIES IN GEORGIA.

26 | Investor.ge ‡ AUGUST-SEPTEMBER 2018 BP GEORGIA SPOKE TO INVESTOR.GE ABOUT THE SHAH DENIZ 2 AND THE EXPANSION PROJECT, THE GEORGIAN PART OF THE .

AUGUST-SEPTEMBER 2018 ‡ Investor.ge | 27 ob Dudley, BP group chief ex- bania and ) is one of the largest made in the region, and which will be ecutive, has called Shah Deniz energy projects anywhere in the world. exporting an additional 16 billion cubic B2 “one of the biggest and most It will link Caspian resources directly meters of gas per year. The Shah Deniz complex new energy projects anywhere ZLWK(XURSHDQJDVPDUNHWVIRUWKH¿UVW reservoir in the Caspian Sea is the starting in the world.” The project includes major time, diversifying energy markets and point for the Southern Gas Corridor series offshore, onshore and pipeline develop- creating a new secure source of supply of wells, offshore facilities, pipelines and ments. for the region,” Chris Schlueter, Country other facilities that ultimately will deliver Manager for BP in Georgia, said. natural gas from the Caspian Sea directly OVER TWO DECADES IN THE %3VLJQHGLWV¿UVWFRQWUDFWZLWKWKH to European markets. Schlueter noted that REGION Azeri government in 1994. Among the the new Southern Gas Corridor (SGC) “The Southern Gas Corridor (com- major energy projects developed since breaks new ground, with gas flowing prised of the Shah Deniz 2 in , WKHQLVWKH6KDK'HQL]JDV¿HOGGHYHORS- from the Shah Deniz offshore develop- the South Caucasus Pipeline Expansion ment, launched in 2006, with 9 billion ment through one of the world’s biggest in Azerbaijan and Georgia, the Trans cubic meters of gas per year. terminals at Sangachal, located southwest Anatolian Pipeline in Turkey and the The Shah Deniz 2 development repre- of , and through a pipeline network in , Al- sents the largest foreign direct investment —SCPX, TANAP and TAP, which, when

28 | Investor.ge ‡ AUGUST-SEPTEMBER 2018 fully completed, will be twice the length FUTURE DEVELOPMENTS The South Caucasus pipeline of the BTC project, at 3,500 km. “The “We believe there are great opportu- expansion (SCPX) is a part of Shan Deniz 2 development is one of the nities for the region’s future in terms of the Shah Deniz Development Project and is one of the most most complex challenges ever undertaken new developments” Schlueter said. important developments in by the global oil and gas industry,” Schlu- BP recently extended the Azeri- terms of the energy security of eter added. Chirag-Gunashli (ACG) contract until Georgia and the larger region. mid-century. The ACG is the largest The SCPX construction is making GEORGIA’S ROLE IN REGIONAL RLO¿HOGLQWKH$]HUEDLMDQVHFWRURIWKH good progress in Georgia ENERGY SECURITY Caspian basin. “In addition to the ACG and remains on-track for the completely new system to start BP’s Chris Schlueter noted that extension and SD2 [Shah Deniz 2], BP is up in 2018. In particular: *HRUJLDSOD\VDVLJQL¿FDQWUROHLQWKH currently involved in and is the operator energy security and supply diversity for of two exploration projects referred to as the region. “Georgia moves one percent the Shallow Water Abershon Peninsula Over 4,500 Georgian citizens were employed at the peak of of the world’s oil and gas volumes with and Shafag-Asiman. BP was also suc- the SCPX project construction. DOPRVWHI¿FLHQF\DQGUHOLDELOLW\´ cessful along with its partner Socar in Today about 2,000 people he said. One percent may not sound like signing a production sharing agreement continue to work on the project, much, but considering this is one percent for an additional prospective area in the including 1,350 local residents. of the entire demand of the planet, it is Caspian Sea referred to as Block 230. KXJHHVWDEOLVKLQJ*HRUJLD¿UPO\DVD There’s also the possibility for future More than $2 billion was critical energy corridor country. “ gas developments both in the ACG and invested under the SCPX project “Our major energy projects, the deeper in the Shah Deniz reservoirs,” he in Georgia as planned, including Baku-Supsa and Baku--Ceyhan oil said. The Baku-Tbilisi-Ceyhan (BTC), $400 million spent on Georgian pipelines, as well as the South Caucasus Western Route Export Pipeline (WREP), suppliers and services. gas pipeline and the current expansion South Caucasus Pipeline (SCP) and the activities (the SCPX project) have sig- South Caucasus Pipeline Expansion Hydrocarbons were QL¿FDQWO\FKDQJHGWKHHQHUJ\PDSRI (SCPX) pipelines that pass through Geor- LQWURGXFHGLQWRWKHÀUVW Georgia and the Caspian region. The new gia will remain key to future oil and gas compressor station (CSG1) near the Azerbaijan-Georgia border Southern Gas Corridor will change the development in the region, underpinning in late December 2017 and energy map of Europe,” he said. BP has WKHHI¿FLHQF\DQGYLDELOLW\RIDQ\QHZ BP is now proceeding with its invested more than $4 billion in energy development in Azerbaijan as well as start-up activities. The second infrastructure and sustainable develop- across the Caspian, providing the export compressor station’s (CSG2) ment projects in Georgia, one of the of production to international markets. start-up is planned for late 2018. largest of which is the South Caucasus “Excellent regional cooperation and Pipeline Expansion project. “We invest- relationship models built in the region The new metering station ed over 2 billion dollars in recent years and solid trusting relationships built (MX81) and the interconnecting to build two new compressor stations, a upon over twenty years of operations in pipeline between SCPX and The new pipeline, and metering stations in Georgia will remain key to the success Traans-Anatolian Natural Gas Pipeline Project (TANAP) are Georgia. 4,500 Georgian citizens were of all future opportunities. ÀOOHGZLWKK\GURFDUERQVDQGDUH employed at the peak of SCPX construc- BP will continue to work closely fully operational. WLRQ´KHVDLG7KH¿UVWFRPPHUFLDOJDV with the governments, investors, part- was delivered via this project on 30 June, ner companies, communities and other The 62-kilometer SCPX pipeline 2018, exactly as planned from the onset stakeholders to build on the experience extension is completed and of the project. This gas leaves Georgia and achievements of our world-class ÀOOHGZLWKJDV via the SCPX metering station at the projects. One of my favorite phrases is Georgia-Turkey border near Akhaltsikhe ‘success builds success,’ and our busi- BP is on track to deliver and continues onwards into Turkey, sup- QHVVLQ*HRUJLDKDVH[HPSOL¿HGWKLV´ commitments for the pipeline’s plying Turkey’s new TANAP pipeline. said Schlueter. ÀUVWJDVGHOLYHULHVLQ

AUGUST-SEPTEMBER 2018 ‡ Investor.ge | 29