Gas output of BP-led Shah Deniz 2 may beat target-Azeri minister

BAKU, Sept 18 Tue Sep 18, 2012 10:43am EDT

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BAKU, Sept 18 (Reuters) - The Shah Deniz offshore gas field led by BP could end up pumping significantly more gas than currently planned when a second stage of the project comes online in 2017, Azerbaijan's energy minister said on Tuesday.

Shah Deniz 2, as the expansion project is called, is currently targeting output of 16 billion cubic metres of natural gas per year, most of which will go to Europe and help reduce the continent's reliance on Russian gas.

However, Industry and Energy Minister Natik Aliyev said that this estimate was conservative and that he believed the field had the capacity to produce much more.

"In my mind it will be maybe 20-25 (bcm)," he told reporters at the sidelines of the Oil, Gas and Media conference in Baku, citing his experience as a geologist and knowledge of fields with similar characteristics in Russia.

The Shah Deniz field, which is already producing gas from its first stage, has more than 1 trillion cubic metres of gas in place, BP said on its website.

BP holds a 25.5 percent stake, as does Norway's Statoil . Other shareholders include Azerbaijan state oil company SOCAR, Russia's LUKOIL, Iran's NICO and France's Total SA.

The consortium has been examining whether to back a pipeline route to Europe across the Adriatic or via the Balkans, and said it planned to announce a decision next year.

However, Aliyev said the Trans-Anatolian pipeline that will bring the gas across Turkey could end up having both westward and north-bound spurs.

"Maybe it is both of them," he said.

"We have a lot of resources now," he added, citing the potentially higher-than-forecast Shah Deniz 2 output and new discoveries.

BP declined immediate comment.

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