BP awards ‘key contracts’ for $6 billion worth Caspian Sea project

Oil major BP, as operator of the Azeri-Chirag-Deepwater Gunashli (ACG) field development, has awarded key contracts for the the Azeri-Central-East (ACE) project located in the Azerbaijan’s sector of the Caspian Sea. Some of the construction activities have already started and will run through mid-2022.

BP said on Monday that the contracts, covering engineering, fabrication and construction, project management, and other services, follow the project final investment decision (FID) announced on April 19, 2019.

The $6 billion development includes a new offshore platform and facilities designed to process up to 100,000 barrels of oil per day. The project is expected to achieve first production in 2023 and produce up to 300 million barrels over its lifetime.

The contract awards underpin the schedule for project delivery and complement the progress being made across the multiple areas and fabrication yards involved in this major development project, BP added.

Platform jacket 

The contract for the fabrication of the jacket for the ACE platform and skirt piles has been awarded to the consortium consisting of BOS Shelf LLC and Star Gulf FZCO. The value of this contract is around $260 million.

The scope of work of the contract includes shop and erection engineering, rolling of tubulars, fabrication and assembly of the jacket and skirt piles, commissioning of installation systems, load-out and sea-fastening of the facility.

All construction and fabrication work under this contract will be undertaken at SOCAR’s Baku Deepwater Jacket Factory (BDJF) named after Heydar Aliyev, using local resources including workforce and construction yard facilities.

The construction works have already started and are expected to be completed in 2021.

Topsides fabrication 

The second contract is for the fabrication and integration of the topsides unit for the ACE platform. This contract was awarded to Azfen in July 2019. The value of the contract is more than $486 million.

The scope of work under this contract includes fabrication and erection engineering, and fabrication, assembly and integration of the platform topsides. This also includes the fabrication of a lightweight drilling package (to be designed by National Oilwell Varco), provision of commissioning support services, load-out, hook-up, and offshore commissioning support.

The topsides unit will be built at the fabrication yard in Bibi-Heybat near Baku. The construction works under this contract have already started and are expected to be completed in 2022.

Topsides drilling facility

The topsides drilling facility engineering, procurement, and construction supervision contract has been awarded to National Oilwell Varco (NOV) (USA). The value of this contract is more than $151 million.

The scope of work under this contract includes detailed design, engineering and equipment procurement and shipment of the drilling facility to Baku. The scope also includes construction supervision oversight of the topsides unit and drilling facility fabricator’s activities including rig fabrication, integration, hook-up and commissioning.

Living quarters 

The contract for engineering, procurement and construction of the living quarters for the platform has been awarded to Emtunga Solutions AB (Sweden). The value of this contract is around $34 million. In addition to the engineering, procurement and construction, the scope of work includes provision of integration and commissioning technical support for the living quarters.

The works under this contract have already started with completion expected in 2022. Assembly and commissioning of the living quarters will be carried out at the fabrication yard in Bibi-Heybat near Baku where the topsides unit for the platforms will be constructed using local resources.

Engineering 

The contract for execute engineering has been awarded to the SOCAR-KBR LLC joint venture. The value of this contract is more than $76 million.

The scope of work under this contract includes engineering of the topsides unit, jacket and skirt piles; the ACE project brownfield works; the system design engineering for subsea facilities; project management – materials management, interface management, information management; procurement support; quality management and provision of construction site support. The work for this contract has started and is being performed through SOCAR-KBR’s UK Leatherhead and Baku engineering offices.

Freight management

The contract for the freight management services was awarded to Transglobal Projects (TGP) LLC in August 2019 as part of the Regional Master Agreement.

The scope of work under this contract includes collection of the materials and equipment from the suppliers’ locations and delivery to Baku sites, including customs clearance. The services to be provided under this contract cover all forms of transportation – international and domestic road transport, river ships, barges, sea transportation, air charters, airfreight and railway.

Ewan Drummond, BP vice president for projects, said: “BP as operator is pleased to announce the first package of key contracts awarded to execute the ACE project safely, efficiently and on schedule. As we celebrate the 25th anniversary of the ACG contract it is worth emphasizing that one of the main achievements of ACG is the high level of local content in our projects which the ACE contract awards show clearly.

“These contract awards once again highlight the ACG partnership’s commitment to optimizing the use of Azerbaijan’s local resources. Construction activities, which have commenced this year and will run through mid-2022, are taking place in-country utilizing local resources and it is expected that, at peak, construction works will create up to 8,000 jobs.”

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