Shah Deniz and the South Caucasus Pipeline

On 13 October 2014 Statoil has sold its 15.5% participating interest in the Shah Deniz production sharing agreement, 15.5% share in the South Caucasus Pipeline Company (SCPC), 15.5% share in the SCPC holding company, and 12.4% share in the Azerbaijan Gas Supply Company (AGSC) to the Malaysian oil and gas company PETRONAS.

Statoil’s 2014 second quarter production from the Shah Deniz field was 38,000 barrels of oil equivalent per day.

Shah Deniz

The Shah Deniz field was discovered in 1999. It is located on the deep water shelf of the Caspian Sea, 70 kilometres south-east of Baku, in water depths ranging from 50 to 500 metres. Shah Deniz Stage 1 began operations in 2006. The Shah Deniz partners are currently producing approximately 26 million cubic meters of gas and 53,000 barrels of condensate per day, approximately equivalent to 225,000 barrels of oil equivalent per day.

The Shah Deniz field is operated by BP (28.8%) and the other partners are TPAO (19%), SOCAR (16.7%), Lukoil (10%), Nico (10%).


A production sharing agreement between seven oil companies and the Azerbaijani authorities for the Shah Deniz area of the southern Caspian was signed in June 1996, and the field came on stream in December 2006.

Gas and condensate from the field are piped to the Sangachal terminal south-west of Baku. From there Shah Deniz gas is delivered to the market through the 42” South Caucasus Pipeline (SCP) via the Georgian capital of Tbilisi to the Turkish border. Then the gas is routed to Erzurum through the system belonging to Turkish pipeline operator Botas.

The total length of the SCP is 690 km (442 km in Azerbaijan and 248 km in Georgia). Condensate from Sangachal terminal is delivered via BTC pipeline to Ceyhan port at the Mediterranean.

Statoil also holds a 20% share in Trans Adriatic Pipeline (TAP) AG, which is developing the pipeline for transport of the Shah Deniz gas to European markets.