Azerbaijan International

Autumn 2003 (11.3)
Pages 78-79

BP Current Developments
BTC Pipelaying Begins
by Tamam Bayatly

Left: President of BP Azerbaijan David Woodward, BTC Director Michael Townshend and Azerbaijan's newly elected Prime Minister Ilham Aliyev visit Sangachal where the first BTC pipe-laying took place. August 11, 2003.

A major milestone took place in Azerbaijan on July 25, 2003, when the first BTC (Baku-Tbilisi-Ceyhan) pipe was physically laid down near Sangachal Terminal. This marked the first BTC pipe to be laid in the three countries - Azerbaijan, Georgia and Turkey. The pipe-laying is progressing on schedule across the country from east to west. To date more than 20 km has already been laid in Azerbaijan.

More than 31,500 pipe joints, totaling about 370 km (about 80 percent), have already been delivered to Azerbaijan. The pipe is being stored at pipe yards strategically placed along the pipeline route. In addition, more than 35 km of pipe (3,000 joints) has already been welded.

On July 22, the first residents moved into Mugan Construction Camp. Similar camps are planned at four locations - Kurdamir, Yevlakh, Ganja and Poylu - to support the construction activities as the operation moves towards the Georgian border.

At Sangachal, work on the BTC Head Pump Station PS-A1 is progressing well, with a number of major foundations, including those for the Main Oil Pumps, already completed. Overall BTC construction is now 35 percent completed.

The project remains firmly within budget of $2.95 billion and on schedule for completion by the fourth quarter of 2004, in anticipation of the export of First Oil from the Azeri Development in the first quarter of 2005.

Left: The first cheese being produced at a plant in Guba. June 18, 2003. The creation of this and 3 other cheese plants was supported by BP.

Community Grants

In August, BP as operator of the Baku-Tbilisi-Ceyhan (BTC) and the South Caucasus Pipeline (SCP) projects announced grants for the implementation of its Community Investment Program (CIP).

The Program directly aims to assist the 82 communities along the pipeline corridor and focuses on income generation, agricultural development, social infrastructure and health awareness.

BP will spend $8 million in community investment and an additional $2 million in environmental investment in Azerbaijan through 2006. They are currently involved in intensive discussions with multi-lateral and bi-lateral agencies to decide plans beyond 2006. In Azerbaijan grants were awarded to the following organizations: Foundation for International Community Assistance (FINCA Azerbaijan), International Rescue Committee (IRC) and Save the Children.

Bottom: Two youth attend the opening ceremony of the school in Agalyg village in the Davachi District of Azerbaijan. Recent construction work was sponsored by AIOC.

IRC will be working on the eastern part of the pipeline route and Save the Children on the Western part up to the Georgian border. IRC has contracted with national NGO (non-governmental organization) partners such as Agro Information Center (AIM), Toward Civil Society (Mulki Jamiyyata Doghru) and Ganja Business Group (GBG) The program is estimated to benefit approximately 160,000 people.

Save the Children will focus on 48 communities along the route between Yevlakh and the Georgian border and work with two local partners, Umid and AIM.

International Medical Corps (IMC) also was awarded a grant for health projects, extending the entire length of the Azerbaijan section of the pipeline route. IMC will work with a group of four local partners, including the Ministry of Health National Reproductive Health Office (NRHO), Shafali Allar (Caring Hands), Azerbaijan National Nurses Association (ANNA), and Azerbaijan Women and Development Center (AWDC).

The total value of these CIP grants is $5.5 million, which will fund projects that continue for at least two years. The remainder of the CIP money will be allocated later, following public announcements.

The Azeri Project
Construction works for Central Azeri (Phase 1) of the Azeri Development Project are progressing on schedule and are 70 percent complete. The project has an excellent safety record: more than 15 million man-hours have been carried out without the loss of a single day away from work at Sangachal on the topsides construction and subsea pipelay. More than 6,000 Azerbaijanis are currently employed.

The Living Quarter modules for the Central Azeri production, drilling and quarters (DQ1) platform arrived in Baku in July from Sweden where they were built by Pharmadule Emtunga. The mini modules were built abroad and delivered from Gothenburg via both northern and southern canal routes, on a fleet of three river vessels in three shipments. The modules arrived at Baku's SPS shipping berth and have been successfully installed on to the Topsides Deck. The Living Quarters consist of 48 mini modules and provide a 300-bed facility during the offshore hook-up phase, reverting to 200-beds during operations.

Drilling Modules Arrive
All four shipments of the Drilling Modules and associated equipment for the Central Azeri production, drilling and quarters (PDQ) platform have also arrived in Baku from France where they were built by Eiffel. Assembly and commissioning will take place at the SPS yard in Baku.

The Drilling modules left France in July and arrived in Baku on September 2nd. Once the modules are successfully off loaded at SPS, they will be installed on the integrated deck by mid-October. The Drilling Modules for the Central Azeri platform are comprised of three main components: Drilling Support Module (DSM), Drilling Equipment Set (DES) and Drilling Derrick. The modules are designed to provide drilling from 48 slots during the operational life of the Central Azeri PDQ platform.

Azeri Project Subsea Pipelay
The subsea pipelay activities for the Central Azeri project began near Baku late June. They involve laying 186km of 30-inch pipe to connect the Central Azeri production, drilling and quarters platform with the Sangachal Terminal onshore. The pipelay will be conducted in water depths up to 200 meters.

The pipelay activities are supported by various local Azerbaijan companies, including SOCAR facilities, KMNF Marine Alliances, SPS Marine support base, EUPEC Pipecoatings joint venture with AZPETROL.

The pipe has been manufactured in Germany and Japan and delivered to Baku via the Russian port of Novorossiysk on the Black Sea. While 200 km of the pipe-coating was applied in EUPEC's coating facility in Dunkirk (France), the rest has been done at the EUPEC Azerbaijan coating plant in Baku, a world-class facility and the largest in the Caspian region.

The installation of the landfall sections of both the 30-inch oil and 28-inch gas pipelines were conducted this summer at the beach pull site in Sangachal Bay. The main trunk lines will be laid out to Central Azeri through the winter and early spring next year. This will enable the pipelines to be connected to the Central Azeri platform before the topside facilities are connected in the summer of 2004.

Israfil Huseinov - Pipelay Barge
The upgrade of the pipelay barge Israfil Huseinov began in early 2002 with capabilities to lay pipelines of 32-inch diameter in up to 300m water depths. The new semi-automatic welding equipment is supported by the latest development in ultrasonic non-destructive testing systems. The barge now has a new heli-deck, a new 60-ton crane, refurbished cranes, mooring winches, substantial redevelopment of the living quarters to accommodate 275 workers, on-board safety and life support systems, new fire detection and suppression systems, and two new generators to support the original five Gorky Diesel units in the engine room.

The entire upgrade program has employed 400 Azerbaijanis and involved nearly 140 suppliers and sub-contractors, the majority of which were local companies.

Shah Deniz Contracts
This past summer, the Shah Deniz partners announced the main contract awards for engineering, procurement, fabrication, construction and drilling activities associated with the recently sanctioned Stage 1 development project of the Shah Deniz Gas and Condensate field in the Azerbaijan sector of the Caspian Sea. In February 2003, the Shah Deniz Stage 1 Upstream and Midstream Development Projects were sanctioned, committing an investment of $3.2 billion to the project.

The main contract awards include: two contracts to Technip-Coflexip (France) for the offshore platform design/procurement and for transport and installation activities. An additional contract for the in-country assembly of TPG 500 Offshore Platform is being finalized this month.

Keppel Fels (Singapore) won the contract for fabrication and construction of the hull and topsides. KCA DEUTAG (UK/Germany), an international drilling subsidiary of Abbot Group, was awarded two contracts for platform drilling services. National Oilwell (Norway) will be supplying drilling equipment.

Kellogg Brown & Root (USA) has been contracted for the design/procurement of the onshore facilities to be built in the Sangachal Terminal and for the design of the offshore pipelines.

Azfen/Tekfen Consortium (Azerbaijan/Turkey) will carry out construction at the Sangachal Terminal onshore facilities, including main storage tanks and onshore section of the upstream pipelines.

McDermott Caspian Contractors (USA) will install three upstream subsea pipelines from the TPG 500 Offshore Platform to the Sangachal Onshore Terminal. Nymo Mek Verksted (Norway) will supply Drilling Skidbase and Substructure Fabrication (SSF).

Caspian Drilling Company (CDC), a joint venture between SOCAR and Global Santa Fe, will be involved in pre-drilling operations.

South Caucasus Pipeline
Construction on the South Caucasus Pipeline (SCP) will be implemented by the same BP Project Team using the same pipelay and facilities contractors. It will occupy the same corridor as the Baku-Tbilisi-Ceyhan (BTC) oil export pipeline, in order to minimize the environmental and social impact and achieve capital and operating cost savings.

Contracts were awarded to Consolidated Contractors International Company (CCIC) of Greece for the pipelay in Azerbaijan. Spie Capag, a joint venture with Petrofac will be doing the pipelay in Georgia and the above-ground facilities in both countries. John Brown Hydrocarbons will be providing for design, procurement and support services.

Cheese Factories
BP recently supported the creation of four small-scale cheese-making facilities - two in the Guba district and two in Ismayilli - to facilitate dairy production, strengthen livestock farmer associations, and provide consumers with safe and healthy dairy products.

Construction of the plants and training of operators was made possible through the financial and in-kind contributions by BP, Land O'Lakes and USAID. The total value of the project was $67,130, of which $32,400 came from BP, $17,010 from USAID and $17,720 from beneficiaries and other private donors. The project was managed and implemented by Land O'Lakes, a USAID-supported organization working in economic development.

The facilities include: The dairy processing plant Dogrul Yol in Begrov village of the Guba district. Cheese production of Edam, Bieno and white soft cheese began in May. Production at Elvin located in Amsar village in the Guba district began in April for Bieno and white soft cheeses.

Ruslan 6 began in May 2003 in the Talish village of Ismayilli and produces white soft cheese and Ricotta. Garamaryam village in the Ismayilli district has been producing soft white cheese since June 2003.

The capacity of each of the four cheese-making plants is identical, processing 400 liters of milk daily. With small modifications, the plants can double their capacity to 800 liters. At present more that 65 small dairy farmers serve as milk sourcing base for these cheese-making plants.

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