Autumn 2004 (12.3)
Pages 92-94

BP Current Developments
BTC Pipeline Moves Ahead
by Tamam Bayatli
BP Communications Manager

Since November 1997, the Chirag platform has produced 255 million barrels of oil. Chirag has operated with virtually no interruption since that time. On August 3, we set a new production record from Chirag of 154,000 bopd as a result of recent drilling successes, positive impact of water injection and the completion of the planned shutdown work in July. We continue to be on track to deliver in excess of 125,000 barrels per day for the full year.

ACG Project

The key milestones of the past few months include: (1) completion of the Central Azeri (CA) jacket installation, (2) installation of the new West Azeri (WA) pre-drilling template, (3) re-commencement of WA pre-drilling activities, (4) launch and start of offshore installation of the Compressor and Water Injection Platform (C&WP) jacket, (5) start of East Azeri (EA) jacket fabrication in Baku, (6) start of the first 2004 equipment deliveries via the canal system and the (7) arrival of drilling facilities for the WA production, drilling and quarters (PDQ) platform with six drilling modules and the derrick.

The ACG project currently employs more than 9,500 Azerbaijan nationals across all its construction sites in Baku. This, by far, exceeds the initial job target for Azerbaijan nationals. The construction work progress is on track for the First Oil from Central Azeri (CA) to be early 2005 with facilities construction more than 97 percent complete.

The fully completed jacket for the Compressor and Water Injection Platform (C&WP) sailed away on July 31, from the Heydar Aliyev Baku Deepwater Jackets Factory (BDJF) yard for its permanent location in the Azeri field. It was launched on August 1 and is now being installed on the seabed.

The jacket was fully built within the country, using local construction infrastructure including the BDJF facilities. This is the second largest structure after the Central Azeri production and drilling platform jacket to be installed in the Caspian Sea. The jacket has 12 piles. The total weight of these piles, which are each 128 meters long, is 6,120 tons. The total weight of the jacket including the floatation tanks is 13,250 tons. The height of the jacket is 143 meters installed in a water depth of 128 meters.

Central Azeri (CA) Topsides
Mechanical completion of the CA topsides was finished by the end of May and pre-commissioning and commissioning is nearing completion. The sail-away is currently scheduled for the end of September when the topsides will be floated over the jacket as a single unit. As soon as the STB-1 is completed, the C&WP jacket installation works will return to the BDJF dock for some modifications to enable it to carry the 15,000 ton topsides.

Drilling Modules Arrive
The last of the six main drilling modules for the West Azeri (WA) production, drilling and quarters (PDQ) platform arrived in Baku in mid-August from the Netherlands where they were built by Mercon, AIOC's drilling modules construction contractor. The total dry weight of these modules including the drilling derrick is approximately 4,500 tons. The integration into the WA topsides and commissioning will take place at Heydar Aliyev Baku Deepwater Jacket Factory (BDJF) yard.

Once erected, the Drilling Modules for the West Azeri platform will be comprised of three main components-the Drilling Support Module (DSM), the Drilling Equipment Set (DES) and the Drilling Derrick. The modules are designed to provide drilling from 48 slots during the operational life of the West Azeri PDQ platform.



Above: The Jacket of the Central Azeri C&WP (Compresor and Water Injection Platform) being launched out to sea.

Sangachal Terminal Expansion
The Sangachal Terminal Expansion Program to build one of the world's largest terminals is on schedule. Activities related to First Oil are 94 percent completed. Currently, the program employs more than 1,500 persons, the majority of which are from villages and towns of the Garadagh district.

Baku-Tbilisi-Ceyhan (BTC)
BTC construction activities are continuing on schedule. Today, we have major activities in 17 construction sites along the entire BTC route between Baku, Azerbaijan and Ceyhan, Turkey. The project has been spending some $4 million a day since the commencement of construction activities and this will continue through this year until the completion of the pipeline in the first half of next year.

Today the project hires more than 21,000 employees. Of these 4,170 are working in Azerbaijan and 80 percent are Azerbaijan nationals.

By August 8, 2004, 1,695 km of the construction corridor had been prepared across the three countries, with 1,583 km of pipe placed ready for welding, 1,487 km of pipe welded, more than 990 km of land trenched and 875 km of pipe lowered in the ground. In total we have backfilled about 798 km and reinstated over 310 km of land in the three countries. Overall BTC construction works are about 75 percent complete.

In Azerbaijan the pipe-laying is on schedule. Overall progress is 80 percent complete. The construction team has successfully completed the hydro testing of first 47 km of the pipeline from the Sangachal Terminal to KP47. Good progress on major crossings continues to be maintained along the route. Of the total 443 km of the pipeline length in this country, 427 km of the Right of Way (ROW) have been cleared, 425 km have been strung, and 420 km of pipe have been welded, 300 km have been trenched, 285 km of pipe have been lowered in the ground, and 262 km have been backfilled. About 175 km of land have already been reinstated.

Construction activities on the BTC Head Pump station in the Sangachal Terminal are progressing on schedule with over 85 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 are nearing completion. The Central Azeri section of the BTC Head Pump station has already installed the first three main oil export pumps. Additional two pumps will be delivered to Sangachal this year for early installation as part of the BTC West and East Azeri works.

Civil and outfitting work has continued at all Spie Capag/Petrofac joint venture facilities locations. Works at the Pigging Station (80 percent complete) and the Pump Station PS-A2 (40 percent complete) near Yaldilli in the Yevlakh district, and at the Intermediate Pigging Station IP-A1 (65 percent complete) near Kurdamir are progressing on schedule with 70 percent of the work for all the above ground installations in Azerbaijan already complete.

In Georgia the pipe-laying and construction of pump stations are progressing on schedule. Overall progress is 74 percent complete. Of the total pipeline length of 249 km more than 245 km of the ROW have been cleared, 238 km have been strung, and 220 km have been welded. In addition, some 160 km of land have been trenched, pipe has been lowered along 142 km of pipe and backfilled in 125 km of land. More than 55 km of land have already been reinstated.

In July 2004, we received official notification from the Georgian Ministry of the Environment of a two-week suspension on the section of the Baku-Tbilisi-Ceyhan pipeline 15 km from Borjomi. The Georgian government undertook a review of the security arrangements for the pipeline in the area. BTC complied with the notice, and agreed to additional measures with the Government of Georgia. Construction work began again there on August 6.

In Turkey, BOTAS, the Turkish state-owned construction company, continues to take actions to ensure on-time delivery of the pipe-laying and pump stations construction activities. By the end of July, 74 percent had been completed. BOTAS have cleared about 1,023 km of the 1,076 km long ROW of the pipeline and strung pipe the length of about 920 km and welded 850 km of pipe. In addition, they have trenched some 534 km of land, lowered 448 km of pipe in the ground and backfilled over 410 km of land. About 83 km of land have been reinstated.

The joint commission led by Azerbaijan's Deputy Prime-Minister Abid Sharifov and the Turkish Energy Minister Hilmi Guler continue to review progress of the Turkish section on a regular basis and agree on recommended actions. As part of these reviews, BOTAS has committed to mobilizing an additional pipeline spread in Lot A near the Georgian border.

BTC is a major project, which will make a positive difference by bringing significant benefits to the region. By avoiding the Bosphorus it will help relieve the inevitable growth in oil-related traffic and associated environmental risks. It will create substantial revenues for transit countries, and will help strengthen economic and political links between Azerbaijan, Georgia, Turkey and the West.

Shah Deniz
The third Shah Deniz pre-drill well was suspended on July 15, with the results being positive. This completed the Shah Deniz Stage 1 Pre-drilling Program, which began when the Istiglal semi-submersible drilling-rig sailed away in March 2003. Since that time, the Shah Deniz drilling team has successfully set the 15-slot seafloor-drilling template, drilled and suspended the three planned pre-drilling wells and discovered an additional gas reservoir below previously mapped horizons.

These three wells have been some of the most challenging BP has drilled globally. The drilling team has been able to achieve some 436 rig-days without a serious accident and the entire Stage 1 pre-drilling campaign been completed within 15 months, which is about three months ahead of the original plan.

BP will continue to analyze the data about the quality and productivity of the entire reservoir. This will also enable us to better plan for future drilling operations from the platform after TPG500, which is commissioned in the middle of 2006.

TPG500 platform
The completed hull sections of TPG500 platform were loaded out in late July from Singapore. A ceremony was held on July 26, in the fabrication yard of Keppel Fels, the Shah Deniz contractor for the out of country fabrication of the platform hull strips, to celebrate this important milestone. The platform strips are now on a two-month journey from Singapore to the Black Sea where they will be offloaded and towed through the Russian canal system to their final destination-Baku.

The hull sections will be transported by a heavy-lift vessel (Mighty Servant III), operated by Dockwise. The platform hull comprises 15,000 tons of steel and is formed of 12 block sections and over 680 steel panels. The hull strips have been completed within the 12-month timeframe, and with a safety achievement of more than four million man-hours without a lost time incident. The fabrication of the accommodation block for 120 personnel has also been lift completed by Keppel Fels safely and on schedule, and will be shipped separately using a heavy vessel.

The TPG500 will be deployed in the Shah Deniz gas-condensate field in the Caspian Sea, approximately 100 km to the south of Baku, Azerbaijan. Delivery of first gas to Turkey, the primary sales market for the Shah Deniz project, is targeted for the fourth quarter of 2006.

South Caucasus Pipeline (SCP)
In Azerbaijan, 62 percent of the total linepipe has already been delivered for the Azerbaijan section of SCP. Approximately 38,000 joints of pipe will be needed for the Azerbaijan section (442 km). Transportation of pipe shipments will continue until the end of this year. The pipe is 42" in diameter and is supplied by Sumitomo Corporation which is providing all SCP pipe for both Azerbaijan and Georgia.

The pipe joints are being stored in the Yevlakh, Kurdamir and Ganja pipe yards. The pipe will be transferred to the Right of Way (ROW) upon completion of the BTC pipeline when physical construction activities for SCP are planned to commence.

Opportunities to lay SCP linepipe at the same time as BTC are being done at specific locations (such as mud volcano ridge, the Garabagh Canal, the Jeyrankechmaz river and other crossings), thus minimizing environmental impact or exposure to geographical hazard-with two of the six river crossings in Azerbaijan already completed.

Approximately 360 people are currently involved in the SCP construction activities here in Azerbaijan, 263 of the employees are Azerbaijan nationals.

BP in the Community
In June, BP officially launched a project to support the internally displaced persons (IDP) community in Khirdalan near Baku. The project, which involves three greenhouses and a sewing workshop, is aimed at improving social conditions by creating sustainable income opportunities for them.

The project cost $72,407 and has been fully funded by BP. Its direct beneficiaries will be the 170 IDPs from the Gubadli and Jabrayil districts.

The greenhouses and sewing workshop have provided jobs for more than 30 people so far, enabling the community to receive immediate benefits. In addition, the project will indirectly target another 53 families living in the neighborhood.

The sewing workshop started its activity by manufacturing leather goods after the women were trained thoroughly so they could create high quality products, which are sold directly from the workshop.

Football Tournament
This summer the Sangachal Terminal Expansion Project (STEP) launched the First Azerbaijan School Football Tournament on behalf of the STEP sections of the Azeri-Chirag-Gunashli (ACG), Baku-Tbilisi-Ceyhan (BTC), South Caucasus Pipeline (SCP) and Shah Deniz projects.

The three-day tournament involved all 23 local high school football teams in the Garadagh district. These teams represent 11 communities living in the Garadagh district. Some of the settlements like Lokbatan, Sahil and Alat had several schools participating.

The teams were divided into three age groups and 152 total number of games played. The tournament used the sports facilities located in the Sahil, Sangachal and Umid settlements in the Garadagh district as well as in STEP's own sports ground.

Training and Business Services
BP and the International Finance Corporation (IFC), the private sector arm of the World Bank Group, signed an agreement with the Azerbaijan Bank Training Centre (ABTC) in July, awarding grants for a new joint project to provide technical assistance for the development of SME (small and medium-sized enterprise) business services in Azerbaijan in support of local business development.

The total value of the project is $677,250, of which IFC contributed $270,450 and BP the remaining $267,300. The ABTC will provide an in-kind contribution worth $93,600 for general management, facilities, equipment and administrative support services. In addition, the project is expected to generate $45,900 total revenues during its implementation, which will be used to cover further expenses. The project duration is 24 months, starting from June 2004.

The project is designed to create a pool of professional local trainers, whose involvement will initially be on a co-facilitation basis working together with foreign trainers and will then gradually increase to the point when they will be able to take over and independently provide the services themselves.

Firefighting Training
BP, on behalf of its partners in the Azeri-Chirag-Gunashli (ACG), Shah Deniz, Baku-Tbilisi-Ceyhan (BTC) and South Caucasus Pipeline (SCP) projects, hosted a ceremony on August 20 to announce the completion of a seven-week intensive training program for a group of national firefighters. The group included 32 professional firefighters-16 from the Sangachal Terminal and 16 from Azerbaijan's State Fire Fighting Department.

These firefighters will ultimately form the highly skilled Sangachal Terminal Emergency Response Team. The training was conducted at OTI's Technical Training Center in Guzdek and the Sangachal Terminal.

The training exposed the firefighters to conditions of heat, smoke and live fire and required a significant level of physical fitness. The trainees learned how to deal with large flammable liquid fires, confined space entry and rescue of victims from road traffic accidents. The training program proved a good opportunity for BP's national staff to gain fire and rescue competencies, which are fully consistent with the world's best practice. The program will not only enhance BP's emergency response capabilities in the Sangachal Terminal, which will be one of the world's largest terminals, but also help strengthen the skills of Azerbaijan's professional firefighting personnel to international standards.

Petroleum Engineers Award
The Azerbaijan Section of the Society of Petroleum Engineers (SPE) has been granted the 2004 SPE President's Award for Section Excellence. This prestigious award is granted to one of the six honored with this year's President's Award, among hundreds of SPE national sections throughout the world. It recognizes the exceptional efforts made by the Azerbaijan Section in member programs, technology dissemination, co-operation with other civic and professional organizations and development of Azerbaijan's petroleum engineering, in general.

The Azerbaijan Section of SPE was established in 1997. The award will be presented in Houston, Texas, at the
SPE President's Luncheon at the George R. Brown Convention Center on September 29, 2004.



From Azerbaijan International (12.3) Autumn 2004.
© Azerbaijan International 2004. All rights reserved.

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