BP confirms multimillion-dollar deals for gas field expansion and terminal electrification

UK-headquartered energy giant BP has corroborated the award of engineering and procurement support assignments to the SOCAR-KBR joint venture (JV), entailing KBR, a U.S.-headquartered science, technology, and engineering player, and Azerbaijan’s SOCAR.

These contract awards enable the JV to support the Shah Deniz compression (SDC) gas field development and the Sangachal Terminal Electrification (STEL) project, said to be Azerbaijan’s largest oil and gas reception terminal.

The operator of the Shah Deniz gas and condensate field development project and the Sangachal terminal describes these deals as a significant step forward in the execution of the SDC and STEL projects, following the final investment decisions (FIDs) in June 2025.

Matt Kirkham, BP’s Vice President of Projects for the Azerbaijan-Georgia-Türkiye region, Middle East and Africa, highlighted: “I am proud to share a significant milestone in the advancement of the SDC and STEL projects.

“Following the FIDs in early June, we have successfully completed the sourcing phase and awarded key contracts to the SOCAR-KBR joint venture. Their proven expertise in similar Caspian region projects, including the successful delivery of previous SDC project scopes, was a decisive factor in this selection.”

While the SDC contract, valued at £43 million with work planned to be done in 2026, has been effective since July 2025, the STEL project contract, worth £7 million and slated for completion in 2028, began in June 2025.

The SOCAR-KBR JV’s scope of work includes engineering and procurement support for the construction of topside facilities for the SDC platform, jacket and piles for the SDC platform, onshore and offshore brownfield installations (Shah Deniz Alpha, Shah Deniz Bravo, and Sangachal terminal), and system design engineering for integration with the subsea system, including readiness for installation, commissioning and operational readiness.

The contract covers engineering and procurement support services for new equipment and a series of brownfield modifications inside the Sangachal terminal to enable grid power transmission and ride-through protection. The $2.9 billion SDC project is designed to access and produce low-pressure gas reserves in the Shah Deniz field and maximize resource recovery.

The project, which is expected to enable around 50 billion cubic meters of additional gas and approximately 25 million barrels of additional condensate production and export from the field, involves the installation of a new compression facility, an electrically-powered unmanned compression platform, or normally unattended installation (eNUI).

With four 11-MW compressors onboard, BP emphasizes that the SDC platform is designed to serve as a host facility for gas compression from both the Shah Deniz Alpha (SDA) and Shah Deniz Bravo (SDB) platforms; thus, export gas from the platforms will be compressed at SDC before flowing to the Sangachal terminal onshore.

In addition, the project includes several associated facilities to be installed offshore in the Shah Deniz contract area and additional brownfield works to be undertaken at SDA, SDB, and the Sangachal terminal. The construction activities are planned to kick off in 2025.

The completion of work is expected in 2029 to set the stage to receive first gas for compression from the SDA platform in 2029 and from the SDB platform in 2030. These activities will take place in-country, utilizing local resources and creating up to 4,000 jobs.

On the other hand, the STEL project will enable the terminal to connect with the national grid of Azerbaijan, via new facilities to be built both within and outside the terminal, including a new 220/110 kV electricity substation.

This terminal currently uses seven gas turbines to generate the power it needs. Once electrification is out of the way, the turbines will be removed in phases, freeing up the fuel gas for export and enabling a reduction of operational emissions.

The operator notes that the construction activities for the $230 million STEL project, which have already started, are scheduled to be completed in two stages: Stage 1 in mid-2027 and Stage 2 by the end of 2028.

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