TPG 500 Successfully Deployed Offshore

BP, as the operator of the Shah Deniz gas and condensate development project, has now successfully deployed and installed the TPG 500 platform at its permanent location in the Shah Deniz gas-condensate field in the Caspian Sea, approximately 100 km to the south of Baku.

All platform systems had been tested and commissioned prior to the April 10th sail away from the Zykh yard in Baku, where the platform and associated seabed foundations were built and assembled. The platform was then towed to an intermediate location some 70 km from Baku, where the platform legs were successfully mated to the three foundation cans which are each 30 meters in diameter and 15 meters in height and weigh 1400 tons. The TPG 500 platform was then towed to its final location in 105 m of water, where the legs were lowered and then cemented in place. Final installation of the platform over the pre-drill well template required critical precision. This unique installation method was successfully completed offshore on April 27th.

The platform's offshore hook up and commissioning activities will now commence, and the project remains on target to achieve First Gas from Shah Deniz in 4Q 2006.

The TPG 500 is a unique achievement for the Caspian. The entire platform, including the legs, was assembled at the Zykh construction yard near Baku. The three legs for the platform and their foundation structures, were built entirely in the Zykh 3 area of the yard, whilst the whole platform was assembled at the quayside of Zykh 4. Only two other platforms of this type have ever been built, both of which are operating in the UK North Sea.

The TPG-500 platform is a large jack-up comprising drilling, production and accommodation for 120 personnel with a total weight of 32,000 tons (topsides 22,000 tons, legs and foundations 10,000 tons). The platform's drilling facilities are capable of drilling wells with a length of over 7 km and with an outreach of more than 3 km, while its production facilities are capable of processing approximately 1 billion cubic feet (28.5 million cm) of gas and 60 thousand barrels (8000 tons) of condensate per day. Gas and condensate from the field will be transported via sub sea pipelines to the Sangachal terminal.

Mike Skitmore, BP's Vice-President for the Shah Deniz project, said: "This is a unique operation in the Caspian. I am proud to say that the team has completed it successfully and, most importantly, safely. It is the culmination of three years of hard work by over 5000 people involved in the design, fabrication, construction, transportation and hook up and commissioning. I would like to take this opportunity to thank all those who have worked for the project with such dedication in so many countries from Singapore, Norway, France, Germany, USA, Turkey to Azerbaijan. I am equally proud that throughout the project implementation we retained our commitment to maximize the local content and train Azerbaijani nationals in support of development of local skilled workforce. What we achieved is remarkable. At the peak of construction activities Zykh employed approximately 3500 people more than 80% of whom were Azerbaijani nationals. Their performance has been exceptional, both in terms of safety and of quality. Prior to sail away the Zykh yard had completed more than 13 million man hours without a lost time accident. In addition, the project utilized the services of some 257 local companies for provision of equipment, material and other services to the yard. We all now are looking forward to our next and most important milestone, which is the delivery of First Gas to benefit the people of Azerbaijan, Georgia and Turkey."

The parties to the Shah Deniz Production Sharing Agreement (PSA) are: BP (operator 25,5%), Statoil (25,5%), the State Oil Company of Azerbaijan Republic (SOCAR 10%), LUKoil (10%), NICO (10%), Total (10%), and TPAO (9%).

The Shah Deniz Stage 1 project, which was sanctioned in February 2003, includes both an upstream and a midstream development. The Upstream project comprises a 15 well-slot TPG 500 type production, drilling and quarters platform to be installed in 105 m water depth in the second quarter of this year; three sub-sea pipelines of 90 km each -- a 26" pipeline for gas and a 12" pipeline for condensate, and a 4" mono ethylene glycol (MEG) pipeline from the TPG 500 to the Sangachal Terminal; and gas and condensate processing facilities in the onshore terminal.

The Midstream project comprises a new gas export system - the South Caucasus Pipeline (SCP) - from Azerbaijan through Georgia to the Turkish border. SCP is a pipeline 690 kilometers in length (442 km in Azerbaijan and 248 km in Georgia), which is being constructed in the same corridor as the Baku-Tbilisi-Ceyhan (BTC) oil export pipeline in order to minimize the environmental and social impact. The pipeline diameter is 42".

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