Winter 2003 (11.4)
BP Current Developments
of Pipeline in Full Swing
by Tamam Bayatly
Construction work on the Azeri Project is progressing on
schedule and is now over 80 percent complete for Central Azeri
(CA) First Oil vs. 80 percent planned for this year and more
than 50 percent for First Gas through the Compression and Water
Injection Platform (C&WP) vs. 49 percent plan. The West Azeri
(WA) facilities construction progress will be 38 percent vs.
36 percent plan by the end of the year. The project currently
employs more than 7,000 Azerbaijan nationals at its four construction
sites in Baku, which far exceeds the initial job target of 5,000
Jacket Ready To
At Baku Deepwater Jackets Factory (BDWJF), the construction of
the jacket for the Central Azeri Drilling and Production Platform
(PDQ) is completed. The jacket was set on the STB-1 transportation
barge on December 7, 2003, and is sea-fastened, ready to sail
out to its location at Central Azeri (CA) in February. We expect
offshore installation activities to be completed by the end of
Below: Pipe for the BTC pipeline being strung
along the Right of Way.
CA PDQ jacket is the largest structure ever to be installed in
the Caspian Sea. It has been fully assembled in the country using
local construction infrastructure including BDWJF facilities.
The jacket has 12 piles. The total weight of these piles, which
are 146 meters long each, is 8,100 tons, while the total weight
of the jacket itself is 14,130 tons, including the floatation
tanks. The height of the jacket is 143 meters and it will be
installed at a water depth of 120 meters.
The offshore installation will use two strategic vessels: The
Derrick Barge Azerbaijan (DBA) and the Transportation Barge STB-1.
The CA jacket is now fastened on this vessel and will be moored
at BDWJF until sail-away in February 2004. Once the jacket has
been launched, the deck strengthening will be completed, making
this vessel capable of transporting topside weights of up to
15,500 tons. Its next task will be the transportation of CA topsides
in July 2004.
The construction of the jacket began at the BDWJF fabrication
yard in March last year and was completed end of November 2003.
The jacket was built by BOS-Shelf-a joint venture between Saipem
(formerly Bouygues Offshore of France) and BDJF, which is a SOCAR
facility. Four main local subcontractors were used and 1,418
local Azerbaijanis (94 percent of the total labor force) were
involved in the jacket construction activities, involving more
than 2 million man-hours.
Most of the local staff have been successfully trained and re-trained
in various disciplines. We have been particularly successful
in the Health, Safety and Environment (HSE) training program
as a result of which there are no expatriates in the jacket project's
HSE positions, these are now 100 percent run by Azerbaijan nationals.
The Central Azeri PDQ topsides fabrication is progressing on
schedule. Following the successful installation of the Living
Quarters modules on the integrated deck in summer, we completed
the onshore testing of the drilling derrick and safely installed
the Drilling Support Module (DSM) and the Derrick Equipment Set
(DES) Module whose total weight is 2400 tons, on the integrated
deck. With these modules already installed, the Derrick itself
and the flare boom remain the major outstanding lifts, and these
are scheduled for January 2004.
Above: (Top) Arrival of drilling modules by
transportation barges TNI-2 and TMI-6 at SPS for Central Azeri
platform on August 28, 2003.
Bottom: Inside view of the construction of the new higher capacity
crude oil tank at Sangachal Terminal Expansion Project (STEP)
East Azeri Template
Some weeks ago, we successfully completed the offshore installation
of the subsea drilling template for East Azeri (EA). The template
has been secured to the sea bed at the location of the future
EA platform, which is scheduled to be in production in 2007.
The equipment will enable the Dada Gorgud semi-submersible rig
to pre-drill a number of wells prior to the installation of the
platform, thus expediting a much faster ramp-up of oil production,
which will benefit both Azerbaijan and AIOC's shareholders.
The fabrication of the 168-ton template, which has three support
piles - 33 meters each, and two docking piles - 47 meters each,
began in June 2003 at Baku Deepwater Jacket Factory (BDJF) and
was completed in November 2003. The total weight of the template
is 506 tons.
Left: Pipe for BTC being strung along the Right of
Way and prepared for welding.
The EA pre-drilling program currently consists of six wells;
five of them are planned as producers and one as a cuttings re-injection
well. Two of the production wells will have an open hole gravel
pack completion installed as part of the pre-drilling program.
All this work was completed to BP's high safety standards resulting
in no harm to people. Our project team and contractors have once
again demonstrated their firm commitment to performing to BP's
and our partners' high safety expectations. We are also pleased
that the fabrication and installation have relied entirely on
local infrastructure enabling us to considerably increase involvement
of local workforce.
In addition, at BDJF fabrication yard, the C&WP jacket is
taking shape, the West Azeri deck construction is progressing
on schedule, and overall BDWJF site has been performing as a
world-class construction facility.
The Subsea Pipelay
The program, which commenced late June, has achieved tremendous
progress. Already 170km of the 30-inch oil pipeline (over 90
percent) is installed (17 km remaining to complete) with the
peak pipe-lay rates being over 2.5 km per day. Once the 30-inch
oil pipeline is complete, we will commence laying the 28-inch
gas pipeline early next year and this will continue into the
spring of 2004. Pipe-coating activities for Central Azeri are
nearing completion at EUPEC. Pipe for East and West Azeri is
being manufactured in Japan and we expect the first shipments
to be delivered to Azerbaijan in January next year. The project
has also commenced onshore fabrication of subsea tie - in spools
and valve assemblies to complete the pipelines, and has commenced
the upgrade of the diving support vessel Tofig Ismayilov at SPS.
The vessel will enter service on the project in mid-2004 to undertake
diving and cable lay work. Subsea pipelay progress is overall
on track for achievement of First Oil from Central Azeri early
Left: Central Azeri production and drilling platform
jacket on a barge being towed to sea.
The Sangachal Terminal Expansion Program (STEP) construction
activities, which are aimed at building one of the world's largest
terminals, are progressing on schedule and within the budget.
Overall STEP construction works are over 70 percent complete
with all major equipment already delivered to the site. Currently,
the program employs over 3,000 people of which more than 75 percent
are local Azerbaijan citizens. The majority (55 percent) are
local residents from adjacent villages and towns of the Garadagh
The main completed works have included the installation of most
of the major equipment and some of the buildings have already
been commissioned. Progress on the tank construction has been
extremely good with the two main tanks having already reached
their full height of 22 meters. These two tanks are over 90 percent
complete. Foundation works for the third crude oil tank with
the capacity of 800,000 barrels are currently underway.
The installation of the gas dew point control plant is partly
complete. The plant was built in Canada and brought to Azerbaijan
through the canal system using four riverboats. The plant consists
of 22 skids and a number of containers with a total transport
weight of 1600 tons.
The works on the Baku-Tbilisi-Ceyhan (BTC) Head Pump station
in Sangachal are progressing on schedule with over 30 percent
of the works already complete. The completed work includes pump
foundation works and steel structure works for the buildings.
The fabrication works for the 14-meter high pump shelter building
is nearing completion in preparation for receiving in January
2004 the first three of the planned five BTC oil export pumps.
The first oil transport pipe joints in the substation have also
been successfully installed and the construction of the BTC buildings
is nearing completion.
Left: The BTC pipe welding activities along the pipeline
Foundation works for Phase 2 process trains have commenced and
are progressing on schedule. The delivery of the equipment for
the trains is underway.
Work on the Shah Deniz section of the STEP, which commenced in
October, is progressing ahead of schedule. Currently, the Shah
Deniz section activities are concentrated on civil works. The
Shah Deniz work started with the construction of some bridges
and roads to make sure that during the winter period the workers
can safely reach the work site.
The main contractor of the STEP works, Tekfen/Azfen has reached
more than 8 million man-hours milestone without any accident
or injury from the beginning of the construction works in November
2001. This is a remarkable achievement and is the result of extremely
hard work and dedication to safety of all the people involved.
The STEP team has undertaken over 250,000 man-hours in HSE training,
which has been a key factor in the good safety performance.
The Sangachal Terminal Expansion Program (STEP) has also achieved
remarkable progress on Human Development, Social Investment and
Community Development Programs. This year the ACG/STEP Human
Development Program has supported 36 projects of various scales,
mainly in the Garadagh district area where the facility is located.
These are programs, which are aimed at supporting the communities
in such areas as health, economic development and education.
The programs have covered most of the local communities including
the two refugee communities in the neighboring Umid and Sahil
refugee settlements. The number of people benefiting from these
projects is more than one million as the ACG/STEP safety support
through the Salyan Highway Project directly affects several thousand
people every day. The STEP Human Development Project won the
BP Group's Annual Helios Progressive Category Award in November.
At this construction site, extensive yard upgrade works are complete.
We have recently completed 55 new buildings with accommodation
for 260 people and a canteen for 400 people. The upgrade works
have also included installation of 14,500 stone columns and 1,000
steel columns. Extensive modernization and strengthening of the
quayside, where the C&WP topsides will be loaded out onto
the STB-1 transportation barge, is ongoing and this work is due
to be completed in March 2004. At the yard we have already constructed
skidways and support units for the C&WP deck construction.
The panels of the cellar deck have already been erected and the
construction of the weather deck panels is ongoing. The fabrication
of 2,500 tons of primary steel structures has also been completed
in Ceyhan. The Central Azeri C&WP employs over 1,300 people
of whom 81 percent are local Azerbaijan citizens. All local employees
have been through skills development and refresher training courses.
Some 36 local companies have been involved in this project through
the main contractor. The ATA yard upgrades have, to date, used
a significant amount of local material and goods. The project
is also planning to launch community investment programs for
the adjacent areas early next year.
BTC construction activities have continued on schedule. Today,
we have major activities in 17 construction sites along the entire
BTC route between Baku in Azerbaijan and Ceyhan in Turkey. The
project has been spending $4 million a day since the commencement
of construction activities and this will continue through next
year until the completion of the pipeline by the fourth quarter
By the end of this year, BTC will have spent about $1.5bn and
will have committed $2.6bn of the $2.95bn total budget. BTC remains
within this original budget and on schedule to be completed in
time to export First Oil from the Azeri Development in the first
quarter of 2005. Today the project employs about 12,000 people
in the three countries, of whom over 3,250 are in Azerbaijan
and about 76 percent of these are Azerbaijan nationals. The project
activities have required 4 million km of driving a month, which
is about 100 times around the world.
By the week of the 12th of December 635km of the construction
corridor had been prepared across the three countries, with over
480km of pipe placed ready for welding, about 425 km of pipe
welded, about 240 km of land trenched and over 200 km of pipe
lowered in the ground. In total we have backfilled about 190
km of land in the three countries. Overall, BTC construction
works will be over 50 percent complete by the end of this year
with 25 percent of the pipe welded.
Finance negotiations with international finance organizations
including the European Bank for Reconstruction and Development
(EBRD), International Finance Corporation (IFC), the private
sector investment arm of the World Bank Group, export credit
agencies and commercial banks, are now complete with the IFC
and EBRD boards approval of up to $250 million in loans to the
pipeline on the 4th and 11th of November respectively.
The endorsement of the financing package comes after more than
two years of extensive monitoring and scrutiny of the project's
environmental and social impact, as well as a thorough public
As planned, the BTC Co. Board of Directors met in London in December
2003 to endorse the BTC financing package and this effectively
closed the financing terms. The formality of signing the documents
with all the sponsors, lenders and the governments of the three
transit countries will take place in January, which will enable
us to receive the first drawdown under the BTC external financing
in the first quarter of 2004 as planned.
The project has set new standards in transparency and openness.
All project documentation has been available on the project's
Web site and in hard copy in the three host countries. The project
has already made public its commitment to report revenues paid
to each of the three host countries.
The BTC project has been characterized by unprecedented consultation
- with each of the 450 villages along the route and the 30,000
landowners and land users. We have discussed issues extensively
with the host governments, local governments, local and international
NGOs, local and international media and the international community.
Our commitment to both consultation and openness will continue
beyond the disclosure period.
Shah Deniz Project
The Shah Deniz gas and condensate development project has made
significant progress since Stage 1 sanctioning in February 2003.
In Azerbaijan, the project is currently progressing the upgrade
of the Zygh 3 yard facilities to allow fabrication of the TPG
500 platform leg sections. Work initially commenced in October
of this year and significant progress has been made in clearing
and developing the site for the fabrication to commence in early
Establishment of the site offices and infrastructure is nearing
completion and mobilization of the BP and contractor/subcontractor
teams is substantially complete with more than 300 people working
on the project in Baku. As it is the case with all BP projects,
HSE training and performance are considered of utmost importance,
and at Zygh all personnel have completed safety inductions and
training to ensure a safe place to work for all the people working
at the site.
The first shipment of leg materials comprising leg chord sections,
nodes and braces arrived in Baku during November and have been
off-loaded and stored at the Zygh 3 yard. Assembly work on the
legs will commence in January 2004. Work to strengthen the existing
quayside and provide reinforced areas to fabricate the TPG 500
leg foundation cans is progressing.
The main TPG 500 hull is being fabricated in four self-floating
strips at Keppel FELS shipyard in Singapore, these self-floating
hull strips will be transferred into the Caspian Sea via the
Volga Don canal system and will arrive in Baku in October of
Offshore, BP spudded the second pre-drilling development well
in September, as part of the Shah Deniz Stage 1 Pre-drilling
Program. The well is located on the northeast flank of the Shah
Deniz field at approximately 101 meters of water depth. The design
depth of the well is 6,610 m. and has now reached 6,244 m. Drilling
should be completed by late January 2004. Then the third pre-drill
well will be dug, a project estimated to take about six months
Sumitomo Corporation will be supplying 700km of large diameter
welded steel pipe for the South Caucasus Pipeline (SCP). BP expects
the arrival of the first SCP pipe in Azerbaijan in January, pipe-lay
activities to commence in the fourth quarter 2004. Engineering
and procurement activities are continuing on schedule.
Back to Index AI 11.4 (Winter
| Search | Magazine
| AI Store | Contact us
Other Web sites
created by Azerbaijan International
AZgallery.org | AZERI.org | HAJIBEYOV.com