Baku Shipyard books first major contract

APRIL 23, 2014 — Azerbaijan's Baku Shipyard LLC has secured a contract worth US$378 million from BP Exploration (Shah Deniz) Ltd, the operator of the Shah Deniz gas field development, to design and build a Subsea Construction Vessel (SCV).

The SCV is the first major contract secured by Baku Shipyard since its inauguration  in September 2013. State Oil Company of Azerbaijan Republic (SOCAR), , Azerbaijan Investment Company (AIC) and Keppel O&M own 65%, 25% and 10% shares in the yard respectively. It is managed by Keppel O&M.

When completed, the SCV will be deployed for the Stage 2 development of the Shah Deniz field, which lies some 70 km offshore in the Azerbaijan sector of the Caspian Sea.

The Shah Deniz Stage 2 project requires a subsea installation vessel to install the subsea structures over 11 years between 2017 and 2027.

With a deadweight of 5,000 metric tonnes at 6.5 m draft, the vessel will have dynamic positioning to allow for work in 2.5 m significant wave height (Hs), a 750 metric tonne-main crane for 600 m-deep subsea operation, an 18-man two-bell diving system, two work-class remotely operated vehicles, a strengthened moon pool, two engine rooms with six 4.4MW  and two 3.2MW engines .

The SCV will be designed by Marine Technology Development, the ship design and development arm of Keppel Offshore & Marine (Keppel O&M). The vessel is expected to be completed in April 2017.

Mr. Rovnag Abdullayev, President of State Oil Company of Azerbaijan Republic (SOCAR), said, "We are very privileged that BP Exploration (Shah Deniz) has chosen Baku Shipyard to design and build the SCV which will support the Shah Deniz gas field Stage 2 development. We believe that Baku Shipyard, under the management of leading global offshore and marine group Keppel O&M, is well placed to support Azerbaijan's growth in the oil and gas sector, and we look forward to building up our track record with more significant contract wins in the years ahead."

Mr Gordon Birrell, BP's Regional President for Azerbaijan, Georgia and Turkey, commented, "We are pleased to begin cooperation with yet another major local service company to advance the executional phase of the giant Shah Deniz Stage 2 development project. This new flagship vessel for the Caspian, to be built by Baku Shipyard, will provide essential support for the construction of the Stage 2 subsea structures which will form the biggest subsea production system in the Caspian. Clearly, the contract underpins our plans to deploy for the first time new advanced subsea production technology in the Caspian as part of the Shah Deniz Stage 2 development.

"I am also pleased to say that the contract we have signed today is among the 12 major contract awards for the Shah Deniz Stage 2 and South Caucasus Pipeline expansion projects which we have awarded since we announced the final investment decision lin December 2013. These contract awards are part of the overall tremendous progress being made across multiple areas of this major development project which underpin our efforts to deliver first gas in late 2018. The Shah Deniz partnership remains committed to maximising the use of local resources in delivering this important gas development project. It is a world-class project that can only be delivered through close cooperation among BP and Shah Deniz partners including SOCAR and Azerbaijan's local supply chain."

According to Keppel O&M, the 62-ha Baku yard is capable of undertaking the construction of a wide range of specialized vessels and merchant ships including subsea vessels, anchor handling tug/supply vessels and multi-purpose offshore support vessels such as platform supply vessels, as well as tankers and cargo vessels. The yard also has ship repair and conversion capabilities.